Research On The Risk Of A-bank's Commodity Trade Financing

Since reform and opening up,China's economy maintained rapid growth.China has grown into the world's second largest economy,international trade has become an important engine of China's economic development.With the growing of industrialization,China's demand for the raw materials has been increasing rapidly.China has become an important participating country in the bulk commodity market.In the future,China's dependence on imports of bulk commodities will remain at a high level.With the expansion of the scale of bulk commodity trade,bulk commodity trade finance business in commercial banks has grown up.As one of the earliest foreign trade financial services provider,A-bank has developed into the most authoritative,the largest in International Settlement in domestic commercial banks.Thus,bulk commodity trade finance business account for a large proportion in the A-bank's business.A-bank will also focus on the product innovation in the bulk commodity trade finance.With the Qingdao Port bulk commodity trade finance scandals exposure in 2014,new risks in commodity trade finance business are emerging.How to prevent the risk is becoming particularly urgent.From the perspective of improving A-bank's risk prevention and control system,this paper firstly describes the background and significance of studying and makes a brief introduction of the characteristics of bulk commodity trade finance.Then this paper introduces the status of bulk commodity trade finance business of A-bank and the status quo A-bank's bulk commodity trade finance business risk prevention and control system from three aspects.There are A-Bank's approval processes,customer risk assessment methodologies and the unified credit and trade finance.This paper then identifies the existing problems in the risk prevention and control system and analyses the cause of these problems.Then,this paper summarizes the problems existing in the commodity trade financing business risk prevention and control in the process of A-bank from three perspectives of credit risk,market risk and operational risk.Finally,this paper gets some suggestions for improving the problems to help the A-bankcarrying out the task of expanding commodity trade finance product innovation.Countermeasures can not only adapt to the development of commodity trade business under the new economic situation,but also effectively help A-bank to prevent the risk of the bulk commodity trade financing business.It also can be able to help a bank to develop and expand the bulk commodity trade finance product innovation,help a-bank to develop bulk commodity trade finance.