Exploration On Applicantion Of Credit Default Swaps In Risk Management Of Loan Of Industrial Bank

Loan business is one of the main businesses of commercial banks in China,the quality of loan assets directly affects the stability and efficiency of the commercial banks' daily operation.In our country,as the management style of the credit assets,the commercial banks still insist to choose the way of holding a long time until the loan assets fall due.In this way,the country commercial banks bear the most part of the credit risk in the process.With the gradually opening of the financial market and the gradually reduced of the limitation of the foreign banks to enter the domestic financial market,the domestic commercial banks have to face the increasingly fierce competition.In order to maintain the continuous growth of the scale and profit,their need to change the pattern of the loan business is imminent.The truth is that the traditional management way of the held-to-maturity does not match to the increasing of credit risk management.So the commercial banks are urgent to seek a new loan risk management tool to help them establish a more active and effective way.At present,the credit default swap business has just started in China,and some pilot projects have achieved good results.Our country introduced the corresponding management measures and business guidance to develope the credit default swap business in domestic financial institutions,Those suggest that the use of credit default swap in the management of credit asset is the most important way to make the commercial proactivity in using credit default swap.This paper systematically sorts out the basic principles of the credit default swap and the credit risk management.It also analyzes the development process of credit default swap business and summarizes the experience in the bank loan risk management at home and abroad.Take the actual situation of the credit assets and the credit risk management of the Industrial Bank(CIB)as a starting point,combining their management way of the bank credit assets,this paper comprehensively discusse the credit default swaps' internal and external environment,the necessity and existing problems of the CIB.After that,it proposes a reference design for the structure and contract of credit default swap transaction structure of industrial bank.Moreover,in combination with the specific cases,the paper analyzes the credit default swap products and the reasonable application of loan risk management in industrial bank.Finally,this paper puts forward some suggestions and countermeasures to solve the problems in developing credit default swap business of the CIB,and provides reference for China's commercial banks to develop active loan asset risk management methods.