The Research On Letter Of Credit Of Bank Of China For Risk Management

With the rapid development of global economy, international trade settlement is becoming more and more frequent. Remittance, collection and letter of credit are gradually becoming three main payment instruments in international settlement. Because of the character that using banks'credit as primary liability of payment, letter of credit is taking the place of commercial credit and becoming the most important payment instruments in international settlement. And due to the entrance of banks' credit, it does not only ensure the smooth movement of the operation of the letter of credit, but also enhances the entire progress of international settlement.Bank of China is always an apotheosis in the specialty and standardized operation of the letter of credit and it has kept a leading position in market shares and innovations in the area. Under the new economic situation, the requirement of supervision and the challenges of internet finance, it becomes an essential consideration and a meaningful research to investigate the way which suits itself to control the risks in an effective way and procedure.With the combined method of literature review and actual investigation, combing theory with practice, this thesis lists and analyzes basic status of the operation of the letter of credit, the structure of the operation management, the management requirement of operational risks; recognize the potential risks step by step:buyer's risks, seller's risks, operational risks, credit risks, market risks and electronic risks; with the combined method of summarization and logical deduction, this thesis aims at analyses and estimates the potential risks in an all around way; with the combined method of standard research and case study, this thesis analyses and verifies the importance of risk management of the operation of the letter of credit. This thesis not only focuses on quotes theoretical reference domestically and abroad, but also focuses on the real commercial banks'L/C cases as the object for the researches, which strengthen the maneuverability of this thesis and widen and deepen the understanding of the risk management of the operation of the letter of credit.With the development of electronic trend in the global trade, the traditional operation of letter of credit cannot satisfy the need of international settlement in global trade any longer. Since 2013, the form of electronic presentation came into sight in the operation of letter of credit. This thesis enhances the recognition, analysis and evaluation of the electronic risks on the basis of the traditional operation of the letter of the credit, and makes risks management suggestions for the present phase. This thesis hopes to fill the blank in the electronic risks management, and improve the risks management system of the L/C operation of Bank of China.This thesis combines the real practice of Bank of China. To ensure the measures of risks management for the operation of letter of credit can be effective, this thesis sets down particular steps and guarantees in the area of buyer's risks, seller's risks, operational risks, credit risks, market risks and electronic risks. The writer hopes that on the basis of providing effective ways to prevent the risks of the operation of letter of credit, the L/C operation of Bank of China can keep growing in a healthy and rapid way, which can provides the customers professional, safe and efficient service and enhance the leading position for the Bank of China in the fierce competitive market.