Risk Control And Risk Management Research Of Financing Assurance In Hebei

Financing guarantee institution is a novel economic form which is developed in recent years and plays a positive role in enhancing trust in SMEs for getting loans or private financing. However under the growing pressure of Chinese economic downturn, development of businesses, especially SMEs, gets increasingly difficult;short-term financial intermediation space becomes increasingly smaller, thus leading to the fact that the loan cannot be paid on time or even paid at all. As trust-enhancing and assurance agency, the financing guarantee institution becomes the compensatory party, resulting in a series of risks.Financing guarantee institution provides financing guarantee services for businesses or individuals, while also sidelining non-financing guarantees such aslitigation preservation guarantee, performance guarantee and project performance guarantee. The institution charges a guarantee fee in accordance with the guarantee amount and takes the compensatory responsibility for the creditor, wherein issues of moral risk, market risk and even systematic riskoccur. How to effectively reconcile and resolve these risks is the key to promote the healthy development of the financing guarantee industry.Due to relatively low level of the guarantee companies’ s governance structure, relatively small scale of the guarantee capital, low quality of personnel, realatively low level of information technology, low level of credit, low risk control ability and other reasons, the integral capacity of risk prevention and control of the credit guarantee industry awaits to be strengthened. The former risk control system needs to be improved urgently, to provide better financing guarantee services for SMEs and “Three Rural”.This paper starts with the experience and lessons from risk prevention, control and handling of guarantee institutions in recent years in Hebei Province. From such perspectives as development history, organizational structure, business operation mode, etc. of financing guarantee institutions, this study analyses in depth the factors that were in risk. And the study also sorts out the causes, processes and results of several typical risk cases which happened recently, and multilaterally summarized risk prevention, control and handling of financing guarantee institutions from diverse perspectives such as government regulation, self-construction of guarantee institutions, and social factors such as bank and news media. Based on that, the paper abstracted how to quickly and effectively handle risks on new circumstances, how to prevent and react to risks beforehand, in-process and afterwards on every link.