The business of negotiable instrument in our banking industry starts from the 80’s after the Reform and Opening. After thirty years of development, the domestic business of negotiable instrument grows out of noting and expands from small scale. At present, the market of negotiable instrument has become indispensable part of our currency market. Financing by negotiable instrument has gradually become the first choice among ways of financing for enterprises. However, with the explosive growth of the business of negotiable instrument, the accumulated risk has been gradually revealed such as credit bubble, and even some criminals collide with bank employees to commit frauds. In recent years, some serious cases of frauds on negotiable instrument have been disclosed, which caused bad impact and heavy losses to banking industry and even the whole finance market. Therefore, how to protect against the risk of negotiable instrument and how to establish an effective system of risk prevention has become the main and urgent problem to be solved. At present, it has become consensus that in order to develop the business of negotiable instrument, we must establish the system of risk prevention and complete the relevant methods for risk management.This article researches on the issue of risk prevention with respect to the business of negotiable instrument in Shanghai Pudong Development Bank through using the theories of finance, statistics and management science, and adopting the way of qualitative analysis and quantitative analysis. Firstly, the article sets forth the research background, the aim and distinguishing features. In addition, the article introduces the relevant notions and theories on the risk of negotiable instrument, pointing out that these theories are very important as the basic theories for the risk prevention of negotiable instrument. And then the article gives detailed introduction with respect to the business of negotiable instrument and operation procedure of Shanghai Pudong Bank, summarizes business types of negotiable instrument, current status and detailed operation procedure and points out that the main risk of the business of negotiable instrument for Shanghai Pudong Bank includes credit risk, market risk and operation risk. Upon the systematic analysis of the aforesaid three types of risk, the article discusses the respective feature with respect to credit risk, market risk and operation risk and analyzes the cause of formation. Also the article elaborates on the risk prevention and related methods and provides effective methods against the above three types of risk so as to establish an effective and practical risk prevention system. At last, the article sets forth that in terms of the business of negotiable instrument, Shanghai Pudong Bank shall make great efforts to expand the group of high-quality clients and develop diverse financing products relating to the negotiable instrument and establish mature management system against the potential risk of the business of negotiable instrument. |