Domestic Enterprises To Invest In Financial Derivatives Risk

In 2008, the subprime mortgage crisis that originated in the United States made both the global virtual economy and real economy into a slump. And our enterprises have also been avoided in the crisis. Many central enterprises suffered huge loses due to invest overseas financial derivatives. We need to think about these problems. Why are these large enterprises so vulnerable, and why these financial derivatives that intended for risk-averse gave these enterprises so great disaster.The author analysis this problem from the theory - incomplete contractual, and two sides - uncompleted financial derivatives contracts and uncompleted enterprise contracts.Due to personal knowledge and information are also limited, the environment is complexity and uncertainty, and the information is also asymmetry and incomplete, contractual parties could not confirm or observe every possible events, so that the contract is not complete.Because of the complexity, highly specialized and influencing factors of variability, the financial derivatives have high-risk potential. Therefore, adverse selection and moral hazard problems are inevitable in financial derivatives transactions, and all of these do harm to the wreakers.According to the contractual theory, we can consider the enterprise as a series of combinations, and these series of contracts are of course uncompleted. As the SASAC's regulatory path for China's central enterprises is too long, so the regulatory is ineffective. Many central enterprises enter the overseas derivatives markets in the absence of unapproved. There are also many problems in investment risk management. Because of the lack of a sound risk control mechanisms and accountability systems within the enterprise, the transaction easily change to speculative. Besides, the high leverage of derivatives make the enterprises faced with tremendous risk..To the root of the problem, the author proposed a series of response methods. Firstly, enterprises need to improve their internal risk control mechanism. Secondly, we need to accelerate the development of our domestic financial derivatives market. And last, we have to strengthen external supervision, and promote the process of legislation relating to the transaction.