Abstract
The rapid development of credit default swap (CDS) market has changed the manner of credit risk management of banks to some extent and has had a new influence on the bank-enterprise credit model. In this study, the credit financing process of credit risk in small- and medium-sized enterprises (SMEs) gathers within a bank, which makes it difficult for SMEs to raise funds. On the basis of the perspective of CDS, we construct an incentive game model of bank-enterprise credit behavior and analyze the influence mechanism of the credit financing of SMEs on CDS contract coupon rate, CDS payout ratio, bank-enterprise credit effort, and loan recovery rate when considering CDS. The result shows that the CDS contract leads to insufficient supervision after a bank loan, the moral hazard of the SMEs rises, and the probability of credit default events increases. In addition, in view of CDS, the SMEs can access more credit funds.
Highlights
Under the background of the development of the new normal of China’s economy, the development of small- and medium-sized enterprises (SMEs) is related to the realization of economic structure transformation, economic benefit growth, and economic quality improvement
If the traditional lending relationship can be changed and risk transfer approaches can be used to disperse the credit risk of SMEs or increase the capital adequacy ratio of banks and reduce the liquidity risk of banks, the financing environment of SMEs can be improved, and credit default swap (CDS) will become a practical and effective approach to disperse credit risk [21]. erefore, given the incompleteness of SMEs’ credit contracts, this study introduces CDS and establishes a game model of bank-enterprise credit behaviors with CDS mechanism
On the basis of the above analysis, when e > ((2(1 + r))/(d2 · a)) − ((2A2 · α · β)/(d2 · b · (1 + r))) is met, the bank can use CDS products to release capital liquidity and improve capital adequacy ratio, thereby increasing the amount of loans granted to SMEs and improving their financing difficulties. us, we propose the following
Summary
Under the background of the development of the new normal of China’s economy, the development of small- and medium-sized enterprises (SMEs) is related to the realization of economic structure transformation, economic benefit growth, and economic quality improvement. SMEs lie about the financial truth and camouflage their financial statements; agencies cannot understand the actual operating conditions of SMEs, which increases the operational risks of third-party credit guarantee institutions and make gaining the trust of banks and maintaining a stable bank-enterprise financing relationship difficult for guarantee institutions On this basis, vigorously developing CDS products is of positive practical significance and urgency, considering the manner in which banks’ enthusiasm for lending to SMEs can be enhanced and the problem of SMEs’ lack of loan collateral can be solved. Erefore, given the incompleteness of SMEs’ credit contracts, this study introduces CDS and establishes a game model of bank-enterprise credit behaviors with CDS mechanism It discusses SMEs’ credit behaviors from the perspective of CDS and provides new theoretical guidance for improving SMEs’ financing difficulties and alleviating banks’ credit risks.
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