An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps

An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps

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)...

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Main Authors: Shenghong Wu, Pei Mu, Jiaxian Shen, Wenyi Wang
Format: Article
Language:English
Published: Hindawi-Wiley 2020-01-01
Series:Complexity
Online Access:http://dx.doi.org/10.1155/2020/6639636
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spelling doaj-01a338a3b429459e8d96e21e0475fe992020-12-14T09:46:34ZengHindawi-WileyComplexity1076-27871099-05262020-01-01202010.1155/2020/66396366639636An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default SwapsShenghong Wu0Pei Mu1Jiaxian Shen2Wenyi Wang3School of Economics and Management, Nanjing Tech University, Nanjing, ChinaSchool of Economics and Management, Nanjing Tech University, Nanjing, ChinaSchool of Economics and Management, Nanjing Tech University, Nanjing, ChinaDepartment of Social Sciences, University of Toronto, 1265 Military Trail, Toronto, ON, M1C 1A4, CanadaThe 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.http://dx.doi.org/10.1155/2020/6639636
collection DOAJ
language English
format Article
sources DOAJ
author Shenghong Wu
Pei Mu
Jiaxian Shen
Wenyi Wang
spellingShingle Shenghong Wu
Pei Mu
Jiaxian Shen
Wenyi Wang
An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
Complexity
author_facet Shenghong Wu
Pei Mu
Jiaxian Shen
Wenyi Wang
author_sort Shenghong Wu
title An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
title_short An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
title_full An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
title_fullStr An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
title_full_unstemmed An Incentive Mechanism Model of Credit Behavior of SMEs Based on the Perspective of Credit Default Swaps
title_sort incentive mechanism model of credit behavior of smes based on the perspective of credit default swaps
publisher Hindawi-Wiley
series Complexity
issn 1076-2787
1099-0526
publishDate 2020-01-01
description 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.
url http://dx.doi.org/10.1155/2020/6639636
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