On the Prevention of the Letter of Credit Fraud under Asymmetric Information

The letter of credit has an extraordinary status as a settlement instrument of payment in international trade.The trade principle of Abstract independent makes it fast,convenient and economical and at the same time provides a hotbed for the breeding of credit fraud.In the real conditions of asymmetry information,this paper explores the causes of credit fraud from the aspect of relations between the credit and the nature of credit and suggests the credit incentive and restrictive mechanism should be constructed to prevent credit fraud.