A Study On Korean Trade Finance Systemunder International Financial Regulation

As the growth of the world economic integration, the way and means of international trade and economic cooperation are becoming rich, and the companies’ demand about financial support is strongly growing up. Trade finance as a bank service to transactions in goods and services, through integrated financial services of the whole process of trade, trade fund raising, credit guarantee, risk hedging, and financial management, for enterprises to carry out trade and reduce transaction costs, create more trading opportunities.Capital and productivity level of Korean enterprise is weak, depended on loans and foreign direct investment in the trade. So implementing unified regulations as another Basel members may have a negative impact on the Korean economy, especially have important influence on the financing of small and medium sized enterprises. Therefore, the study of Korean trade finance system in present situation, analysis the characteristics of Korean trade finance and suggest improved better scheme is very important.This paper reviews the relevant domestic and foreign trade and financial issues of current research, analyzes the theories which are based on the trade finance, and the main regulated contents of Basel Accord III. Also it researches development period and current situation of Korean trade.Moreover, it pointed out the risk from Korean trade finance and trade finance system in developing countries to small and medium-sized enterprises, risk problem that increased by changing of the settlement method in trade, non-comprehensive investigation in import and export business loan review process, high ratio sales of foreign branch credit bond. As analyzing those reasons, the main content would be in-depth analyzing the Basel III based on international trade pattern of Korea and the banking industry. Through suggesting to increasing financial assistance to small companies of Korea, to strengthen the bank loan examination system, to expand the bank’s own capital ratio, establish suitable for the Korean situation supervision mechanism to further improve the financial system of the South Korea trade.