The Study On The Risk Control Of Supply Chain Finance Of Languish Bank

The development of supply chain comes from the advancement of economic globalization.International manufacturing giants seek to minimize their costs.They outsource their business through the world.Thus the system of supply chain comes into being.The core manufacturer The brain of supply chain are the core manufacturers.The blood vessel of supply chain are capital flows,information flows and logistics.The maid body are different levels of suppliers and vendors.They process raw materials and sell the products to the market.At last,they receive the payments.These are the complete run of the system.The quality of supply chain influences the competitiveness of enterprises directly.Competition between large enterprises evolves into the supply chain competition.Because enterprises on the supply chain are somewhat dispersed and weak.These lead to rising costs,partly weakened the advantage of division of labor advantage.Concerning this situation,commercial banks exert business innovation and carry out supply chain finance business.Supply chain finance is a new way to collect capital,which depends on supply chain among enterprises.This financing system breaks through the restrictions of the traditional way of collecting money and provides more financial supports to small and medium enterprises.The starting point of supply chain finance is the management of supply chain.Then the commercial banks provide comprehensive financial services and take the enterprises on the supply chain as a whole.The commercial banks design financial plans according to the relations during the transaction and insert capital to the enterprises on the supply chains.To conclude,the commercial banks provide flexible financial products and services during the process.Supply chain finance has developed rapidly in recent years.Many institutions,including the commercial banks,have attached great importance to it.The credit financing of supply chain finance mainly depends on the core manufacturers,backed by real trade background.The payment of supply chain finance comes from the commercial funds.The supply chain finance breaks through the traditional credit business mode,which emphasize mortgage.It provides money to the small and medium companies,which rely on the credit of the core companies.Thus,money can be put into the trade chain and the business risk can be reduced as a result.At the earliest,the bank started the stock financing business sporadically.After 2000,the concept of "self paid trade financing" was created.Earlier in the supply chain finance business is the predecessor of Ping An Bank,Shenzhen Development Bank,in 2006 the "supply chain finance" brand,other banks also have to follow up,practice has proved that the supply chain finance helps the banks to better serve the real economy,helps to reduce the financing cost of financial entities.According to the Aberdeen Asset Management Limited Plc survey,the core enterprises' supply chain finance can effectively reduce procurement costs and extend the accounts of small businesses in the supply chain.Small enterprises can reduce the financial cost and increase the turnover rate of accounts receivable.On the other hand,banks are facing business ceilings.Supply chain finance will help banks expand their business,increase the source of profits,and achieve a win-win situation between banks and enterprises.Research on supply chain financial risk management can help commercial banks effectively reduce business risks,dispel concerns and better develop businesses,and help solve SME financing problems and serve the real economy.According to the development mode,the supply chain finance business can be generally divided into three categories:receivable,inventory and prepaid products.According to the development platform,the supply chain finance can be broadly divided into two modes:offline and online,which are developing rapidly in all banks.Huishang Bank as the main Regional banks based in Anhui area,although the late development in the field of supply chain,with the help of the advanced experience of the industry,attaches great importance to the development of supply chain finance business,nearly three years of rapid development,now has a product system of supply chain finance is complete.At the same time,there are some problems in the development of supply chain finance of Huishang Bank.Huishang Bank is carrying out reforms to further promote the development of supply chain finance business and effectively prevent risks.The supply chain financial business of the Huizhou bank has a great date.However,supply chain finance has its limitations.Due to information asymmetry and principal-agent and other factors,the risk of supply chain finance gradually exposed.Because of the influence of macro economy and industry cycle,the systematic risk of supply chain finance is extremely prominent.And it often turns out that the risk emerges on the whole supply chain.With the emergence of steel trade and other risk events,we begin to reflect on the issue about how to prevent risk of supply chain finance.I am currently engaged in the credit work in Languish Bank.and intend to carry out the risk management of supply chain finance in this bank.I will research on the advanced banking industry and Languish Bank by combing the COSO risk management framework and contingency theory.This paper firstly studies the risk management means of supply chain finance that were introduced by Pinning Bank,who is a pioneer in the field of supply chain finance.The paper then summarizes its advanced experience.Then The paper implements the five elements of COSO theory to sort out the risk management framework of supply chain finance used by Languish Bank.The paper also uses contingency theory to analyze the risk control of supply chain finance in specific environment.It finds out the problems and loopholes in the risk management of supply chain finance of Languish Bank and analyzes the reasons.Finally,the paper try to build an overall risk management framework of supply chain system.Based on the existing theories and predecessors' research results,this paper focus on how to effectively identify and evaluate the financial risk of supply chain finance among the commercial banking system.The paper also highlights the role of performance theory and enterprise culture theory in building a risk management framework of supply chain system.