Promoting the Development of the SME with Bank's Credit Assurance

摘要

The SME produce nearly sixty percent of GDP, contribute to nearly fifty percent of fiscal revenue, and offer nearly seventy five percent of jobs in China. But financing of the SME is very difficult for a long time, and banks think that the risk of the SME loan is very high and have no instruments to hedge credit risk. CDS is a credit derivative contract in which the protection buyer bank makes regular payments to the protection seller and, in exchange, receives a one-off payoff if a reference entity goes into credit events, and is used to avoid credit risk by the credit provider (lender or corporate debt holder). All of CDS contracts are done over the counter.