Risk Management in Commercial Banks' Participating in Private Equity - Case Study Based on Silicon Valley Bank

摘要

Private equity in China has developed rapidly in recent years and commercial banks widely participated in PE business in many ways to share the profits. The risk of loan affiliated to PE business and direct investment is far higher than that of the traditional business of commercial banks. Risk management becomes the key problem deciding whether China can allow mixed operation to give commercial banks the right to participate in PE. Silicon Valley Bank serve for startups and private equity firms for a long time, but it manage the risk successfully, with a low rate of Not-performing loan as 0.6%. It has been one of the top twenty in the U.S. banks. Based on the study of Silicon Valley Bank, this paper compares and analyses risk-control problems which Chinese commercial Banks face, and put forward policy recommendations.