Research On The Risk Management Of Financial Derivatives In Chinese Commercial Banks

Since 1980s, financial derivatives have had a rapid development in the international financial market. They played an important role in avoiding financial risks, and also they brought lots of profits to the enterprise. In recent years, with the rapid development of our economy and the increasingly open of financial markets, more and more commercial banks are using financial derivatives to avoid risks, look for new profit growth point and increase the market competitive power. But, the using of financial derivatives also accompanied with great risks. There are many cases of large losses and bankruptcy of banks caused by the failure of financial derivatives management in the international. Therefore, we should strengthen the study on the risk management of financial derivatives in Chinese commercial banks. In this situation, it is very significant to discuss how to learn lessons from the failure cases of risk management of financial derivatives in foreign banks and to manage the risk of financial derivatives in Chinese commercial banks.This thesis can be divided into five parts:Firstly, it gives a brief introduction of the background and significance, literature review at home and abroad, the main contents and methods.Secondly, it describes the trading status of financial derivatives in our country's commercial banks and the problems of present trading status. It points out that China's commercial banks want to improve and develop the risk management of financial derivatives must draw lessons from failure cases and learn advanced experience from foreign banks on risk management.The third part is the main content of the full thesis. It mainly analyzes three cases that foreign banks failed in risk management of financial derivatives trading. Then, it analysis of the causes of different cases from three aspects:Bahrain Bank mainly from the aspect of market risk management, Allied Irish Bank mainly from the aspect of operation risk management, French Industrial Bank mainly from the aspect of external supervision. Then it points out the common problems that exist in the three Banks on the risk management of financial derivatives. And also it points out what lessons that our commercial banks should draw from.In the fourth chapter, it firstly tentative summarizes the enlightenment that our commercial banks learn from the three failure cases on risk management of financial derivatives. And then combined with China's national conditions and the development situation of the bank's derivatives business, respectively from the market risk management, operation risk management, and external supervision, it puts forward some countermeasures and suggestions about risk management of financial derivatives trading.