Interest Rate Swap And Its Application In China

Today, the international financial market is constantly changing and financial derived products are emerging in an endless stream. While mentioning deriving the financial product, the first response of people is often futures or options. This kind of product has already begun to be familiar by business circles, financial circle and even some private investors. Swap is to be mentioned in numerous international finance teaching materials early, but its intension is still rarely known by the people. In fact, no matter in locking the investment return in order to evade the interest rate risk, or in utilizing the relative advantage and extracting the profit by reducing the interest burden as much as possible, interest rate swap is highly applied in foreign financial circle and business circles, and has already become the most basic and very most effective financial instruments of managing interest rate risk.The interest rate swap is a kind of agreement signed, evolving from in 1982. As Bretton Woods System was disintegrated in 1973, the fluctuating range of the exchange rate and interest rate had obviously increased on the international financial market, which had brought enormous business risk to banks and enterprises. The petroleum volume of Petroleum Exporting Countries organizes falls sharply, and the development of the international debt crisis has assaulted security and flow ability of bank assets. The production of the interest rate swap was helping reduce the operating cost, evade the assets risk, guarantee the profitability and security of the bank, and impels the bank to take the road to financial innovation constantly. As one of the main swap tools currently, the interest rate swap from the day of producing brings congenital advantage. It is convenient and easy to reduce financing cost and financing risk.Though the appearance of the interest rate swap is later than the currency swap, its development speed has far exceeded the development speed of the currency swap, increasing at the speed of over 30% of annual average rate of increase. Because of historical reasons, the past Chinese financial market was not developed enough, and the financial institutions lacked the sense of risk, which make enterprises still stay the so-called interest rate risk on the books.With constant deepening of reform, enterprises begin to pay close attention to its risk appearing while managing. More and more export-oriented enterprises begin to realize the uncertainty brought to its business activities by the interest rate fluctuation. The commercial banks also begin to offer the interest rate swap business. But because of its calculation's complexity, the interest rate swap is covered with the mysterious veil.The People's Bank of China released《the notice about the matters on launching trade pilot project of the interest rate swap of RMB》in February 9, 2006.State Development Bank and Ever bright Bank of China finished the first sum of interest rate swap of RMB, which means the interest rate swap market of our country is established formally.This is great progress of Chinese financial market construction, and has great meanings in the development of financial market. In present cases, there are extremely important realistic meanings in strengthening the research of the interest rate swap t, and promoting the interest rate swap market of RMB.This text belongs to the category of the theoretical research. About this kind of thesis is limited in domestic academia, which results in the relative materials in hand are not enough. In addition the restriction at the knowledge level, unavoidably there are places slipped in the article or remained to be discussed. Earnestly, I expect every teacher and classmate to make a comment...