The Study Of CDS In The SMEs Financing

In current new normal economic environment,the development of SMEs is the most dynamic and sensitive part to reflect the market mechanism,and plays an important role in promoting employment and other economic areas of technological innovation.However,because our country is currently in a difficult period of economic downturn,the bank recovering loan,the pressure loans and the credit crunch behavior became an obstacle to the development of SMEs.And the main reason of the financing problems is that bank takes controlling risk as its first element to determine whether to loans for SMEs.Compared with the state-owned large and medium enterprises,SMEs credit risk is very large,banks prefer to loan the limited credit resources to state-owned large and medium enterprises.This paper proposes to use credit derivatives-credit default swaps,it can not only disperse excessive concentration of credit risk for commercial banks,but also release the capital of commercial banks and expand lending for SEMs.These can solve the financing problems of SMEs.The article first describes the concept of credit default swaps,its Hedging mechanism and development conditions.Based on the realities,analyze the reasons for low percentage of China's SMEs in commercial bank credit.The main reason is that under limited resources conditions,commercial bank can only meet part of the loan applicants,while the risk of China's SMEs is too high,so the credit resources flow to the state-owned large and medium enterprises.For the above reasons,the article then elaborates on dispersing the Risk of a single bank for lending to SMEs through building Innovation mode of credit default swap between commercial banks-bilateral modes.And based on Benedikt Goderis model,we do an Empirical analysis,verify that the purchase of CDS contracts can indeed release bank capital,increase the bank's credit capital,and correspondingly meet the credit needs of state-owned large and medium enterprises,and thus appropriately increase the credit amount of SMEs.Finally,analysis the practical obstacles of the credit default swap in the financing of SMEs in China,for example,the lack of information of SMEs,non-active financial derivatives market and the backward level of supervision.And put forward to cultivate the market activity,reform the interest rate management system and strengthen the supervision to build a healthy trading environment,etc.