Study on the Risk of Commercial Banks by the Debt-for-Equity Swap
International Journal of Business and Economics Research
Volume 6, Issue 4, August 2017, Pages: 58-60
Received: Jul. 19, 2017; Published: Jul. 19, 2017
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Authors
Xiao Wang, The School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, P. R. China
Xin-ming Chen, The School of Government, Central University of Finance and Economics, Beijing, P. R. China
De-yun Zhen, The School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, P. R. China
Ke Gao, The School of Public Finance and Taxation, Central University of Finance and Economics, Beijing, P. R. China
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Abstract
With China’s economy changing into the new normal, the business environment faced by commercial banks has undergone major changes. The real economy is facing many difficulties. The rising rate of non-performing loans has become a business problem which commercial banks have to face. Therefore, in this kind of condition, The debt-for-equity swap seems to be a good recipe for commercial banks to regain their confidence in management. However, the author thinks that the debt-for-equity swap will bring many risks to commercial banks: Financial risk, Liquidity risk, Cash Payment risk and Moral risk. Therefore, if the debt-for-equity swap will be carried out massively, it is not necessarily a good thing for the commercial Banks. So we need to take a cold look at the debt-for-equity swap.
Keywords
Debt-for-Equity Swap, Commercial Banks, Financial Risk, Liquidity Risk, Cash Payment Risk, Moral Risk
To cite this article
Xiao Wang, Xin-ming Chen, De-yun Zhen, Ke Gao, Study on the Risk of Commercial Banks by the Debt-for-Equity Swap, International Journal of Business and Economics Research. Vol. 6, No. 4, 2017, pp. 58-60. doi: 10.11648/j.ijber.20170604.13
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