Research On The Risk Management Of Credit Guarantee Network

Recently in order to get loans from banks, various kinds of chains have been formed between many affiliated companies and parent-subsidiary companies, and even uncorrelated firms in the same region through mutual guarantee and serial guarantee. People call it the "guarantee chain", "guarantee circle" or "guarantee network". Due to imperfect laws, the "guarantee network" phenomenon occurs repeatedly. In addition, because the risks of "guarantee network" have the characters of hidden and contagion, it is difficult for banks to timely discover and control the risks. In this paper, we aim to provide an innovative method for banks to manage the risks of credit guarantee network, and put forward some effective countermeasures based on the empirical analysis.Firstly, we analyze the related theories of the risk of credit guarantee network, mainly including the concept of guarantee, guarantee network and the risk of guarantee network, the causes and risk characteristics of credit guarantee network, and the formation and operation mechanism of the credit guarantee network.Secondly, the risk identification of credit guarantee network is researched. For the risk identification of credit guarantee network, the KMV model is used to identify individual credit risk of companies, while the network analysis method is used to find out the key risk points of systemic risk through related network structure indexes.Thirdly, based on the research of risk spread of interbank network, we analyze the mechanisms and processes of risk spread in detail in two cases which are insolvent and the cash flow break, and build a risk spread model of credit guarantee network.Finally, we conduct an empirical analysis with the data of "Fujian Credit Guarantee Network". According to the comparison of the processes of risk spread in two cases which are insolvent and the cash flow break, we find that the harm caused by the bankruptcy of key risk points is much higher than the bankruptcy than the other companies. In addition, we put forward some proposed measures form two aspects which are the survey before loan and the management after loan.