Research On Risk Assessment Of A Commercial Bank's Investment In Social Impact Bonds

In just a few years,social impact bonds have been rapidly developed and applied around the world.Social Impact Bonds(SIB)successfully unites the public sector and social organizations,giving full play to the high efficiency and high capacity of social organizations,and using the principle of “payment based on results” to ban the “cost-based payment” in the past,making society The problem was solved under the premise of financial constraints.This is a great boon for the government and society as a whole,but investors actually bear almost all the risks.Therefore,it is important for investors to do a good job in risk assessment of investment social impact bonds.China's current social problems need to be resolved,financial pressure is high,and the emergence of socially influential bonds has implications for China.Due to the prominent position of banks in China's economic activities,it has become an investor in China's social impact bonds.Banks comprehensively and systematically assess the risk of investing in social impact bonds,which not only helps banks to control risks,but also attracts more banks to invest in social impact bonds,which is of positive significance to the government,banks and the whole society.In view of the participation of A Commercial Bank Head Office in China's first social impact bond,this paper will be based on A commercial bank to conduct a research on the risk assessment of its investment social impact bond.First,systematically introduce social impact bonds,clarify the classic model of social impact bonds,and analyze the model of social impact bonds in China.Secondly,from the perspective of A commercial bank,we focus on the main project subjects in China's social impact bond model,identify the risk factors of A-commercial bank investment social impact bonds from various project entities,and select 3 indicators after interviewing with experts.The first-level indicator and the risk indicator system of 11 secondary indicators.Then,this paper uses the integrated MCDM method including AHP method(The Analytic Hierarchy Process)and VIKOR method(Vlse Kriterijumska Optimizacija I Kompromisno Resenje)to determine the weight of risk indicators,and constructs an index system that comprehensively evaluates A-commercial bank's investment in social impact bond risk.Judging from the weights determined by AHP,the most important risk for A commercial banks to invest in social impact bonds is the risk of service providers.Finally,this paper will construct an evaluation system for case application and evaluate the risk of A commercial bank investing in a social impact bond for shantytown renovation.The evaluation found that the biggest risk that A commercial bank invests in the social impact bond is the risk of the service provider,especially the service provider's ability to redeem the bond,mainly in the profitability of the service provider and the solvency of the service provider.And the operational capabilities of the service provider.In order to control risks,according to the availability of resources,this paper proposes two options.A commercial bank can choose according to its actual situation.In view of the research conclusions,this paper believes that the risk of investing in social impact bonds is controllable.When commercial banks invest in social impact bonds,they should pay attention to the assessment of the risks of service providers,governments,and independent assessors,and set corresponding risk control measures.