Decision Analysis on Operation of Commercial Banks Based on the Application of Credit CDS
DOI:
https://doi.org/10.54097/hbem.v18i.12786Keywords:
Credit Risk, Commercial Bank, CDS, Credit Default.Abstract
Affected by the new crown epidemic, it is difficult for Chinese small and medium-sized enterprises to ensure the normal operation of the industrial chain in terms of business operation and development, which may lead to the inability to repay their loans in commercial banks in time, triggering credit default incidents. CDS is a new credit derivative instrument, which can alleviate the default risk held by creditors to a certain extent and enhance the trust of both borrowers and lenders. This paper tries to apply the CDS mechanism to the Chinese market, using the TOPSIS model to score some companies, and explore what types of corporate loans commercial banks need to use CDS products for risk mitigation. It is found that enterprises with poor profitability, small development prospects, high credit risk and weak solvency need to pay special attention to bank loans.
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