The Risk Analysis Of Structured Trade Financing

With the development of international trade, the proportion of structured tradefinancing in international trade finance is rising. Structure trade financing has beenfrequently used in China’s large electronic mechanical devices, non-ferrous metals andother commodities trade. It gains the favor of domestic foreign trade enterprise becauseof the unit design of actual circumstances of scheme and the integration of financialmanagement. Structured trade financing has played an important role in improvingChina’s export trade financing structure and strengthen the competitive power of theexport enterprises in our country. This article explores the general processes of structuredtrade finance, the main risk points, risk categories and the main risk characteristics,through studying on structured trade financing business and generally used dozens ofstructured trade financing product in commercial Banks. Then combing with thecomprehensive risk management theory, the article has proposed to build acomprehensive risk management mechanism in structured trade financing, whichincluding risk early warning before the export preparation, risk control with thedocuments on the way and the risk of compensation when payment delayed. This paperargues that the warning of risk before export preparation in structured trade financing riskmanagement is in a key position. It not only provides a way to advance the riskprevention mechanism, but has important reference function during the risk control of thedocuments in transit period and risk compensation of delay of late payment. At the firststage we deeply analyzed the macro and micro risk and provide a feasible evaluationstandard by using the analytic hierarchy process (AHP) and the judgment matrix to do thejob like the level of risk type, risk identification and classification. This fact will providethe implementation basis about the risk management of documents in transit and the riskcompensation of payment delay. Finally, the paper Suggests to our country how toeffectively carry out structured trade financing policy. The article has importanttheoretical and realistic significance on how to strengthen risk prevention and control ofstructured trade financing and how to promote the healthy development of structuredtrade finance.