A Research On The Improvement Of The Risk Control Mechanism Of The Guarantee Circle Of Agricultural Bank Of Chin

Guarantee serves as a legal system initiated for commercial banks to buffer risks,which can be a two-edged sword.As the economy grows,guarantees reconcile the frictions between enterprises needing money to develop business and banks expecting a cushion against loan risks.Thanks to the fast and widespread expansion of guarantees,banks and enterprises are growing when the intricate guarantee circle takes shape.During the downturn,clashes and risks stand out from the guarantee circle,and industries and enterprises highly sensitive to business cycles are vulnerable to risks.Therefore,a domino effect will occur with the risk exposures quickly affecting other companies in the same guarantee circle,causing disastrous debt defaults,even leading to systematic and regional financial risks.In recent years,Agriculture Bank A has been facing increasing pressure from risk control as the economy falters.Because risks are frequently seen in its guarantee circle,Bank A has to improve the mechanism for controlling risks in its guarantee circle to bring the risk control into full play.Against such a backdrop,this thesis focuses on the risk control in the guarantee circle,reviewing related literatures at home and abroad,making clear the definition and types of and characteristics of risks in the guarantee circle,and discussing problems concerning information asymmetry,adverse selection,moral hazards,the game theory and risk management in commercial banks.On that basis,the thesis makes an in-depth analysis of the current risk performance in Bank A' s guarantee circle and problems regarding the risk control mechanism in its circle by the methods of literature analysis,case study,theory analysis and normative statement.Five problems are eventually identified in the guarantee circle of Bank A:frequent occurrence of NPLs and high level of NPL ratios;defects in identifying risks;absence of an effective system for managing classes of guarantee circles;insufficient backup solutions to minimizing risks;and low efficiency in the cooperation between the government and banks,and between banks.After analyzing these problems,this thesis finds the major causes as follows:the risks in the guarantee circle are highly infectious;information asymmetry is evident among banks and enterprises;adverse selection,moral hazards,different views about credit loans and inappropriate implementation of credit loan policies caused by the information asymmetry;the government,banks and enterprises compete with each other;and lack of an effective channel of cooperation between the above three.Given the present situation of Bank A,the thesis centered on the five problems works out a plan to improve the mechanism for controlling risks in the guarantee circle.This plan includes measures for strengthening the capabilities of risk identification of the guarantee circle,improving the management of classes of the guarantee circle,enhancing the whole-process control over risks,providing more solutions to minimizing risks and deepening cooperation between the government,banks,and enterprises.Progress has been made after the implementation of the plan in Bank A,and yet some problems still remain unsolved,based on which adjustments are made for the later work.This thesis also introduces a principle for the continuous assessment,feedback and revision of the plan,which allows Bank A to enhance its risk control of the guarantee circle and whole-process control over risks,to keep its credit loans sound and sustainable,thus achieving the purpose of the research?...