The Risk Control of Pledge Liquidation in Logistics Finance Based on VaR Methodology

The ability of pledge liquidation is essential to logistics finance risk control. In the process of evaluating the ability of pledge liquidation, the price stabilization of pledge is what should be mostly considered. VaR (Value at Risk) methodology is an effective measuring method to determine risks in the field of financial risk management. Quantitative analysis of risk degree caused by price fluctuation was made with that method. It can estimate the maximum possible loss in the future, determine an appropriate line of credit and thus could be used as a reference for risk prediction and prevention when banks provide logistics finance service.