Exchange Rate Risk Management Of Commercial Banks Under The Background Of RMB Exchange Rate Formation Mechanism Reform

The exchange rate risk management is one of the Basel protocol about commercial bank risk control. Since1994, the reform of the RMB exchange rate, the RMB exchange rate formation mechanism reformed many times, in2005and2010Chinese government restart the reform. We thought the future reform of the RMB exchange rate will gradually increase the market volatility, will further enhance the flexibility of the exchange rate, improve the middle price determining mechanism, and improve the middle price flexibility. With the exchange rate formation mechanism reform and capital account control relaxation, RMB exchange rate fluctuations will be more and bigger, the exchange rate risk management of commercial banks is to bring the challenge.The RMB exchange rate formation mechanism reform, gradual and controllable, the new exchange rate system creates a sufficient time for commercial banks to adapt to. The paper believes that the RMB exchange rate formation mechanism reform of commercial banks has been the following:foreign currency deposit and loan business opportunities will be sustained prosperity; the banking of our country part of the middle business will usher in a period of rapid development; China’s RMB exchange rate derivatives market will enter a period of rapid development. Of course, the RMB exchange reform will bring the commercial banks a lot of risk:1import and export business:on the one hand is the exchange gains and losses of the import and export enterprises; on the other hand, is to use the non-beautiful currency settlement and will adversely affect the outside the United States import and export enterprises. Commercial bank credit business of enterprises should be targeted. Facing2problems of commercial banks is:to obtain foreign currency cost, commercial banks should have to guard against the risk control mechanism of foreign interest rates rise; matching problem of foreign asset and liability, also is the commercial bank foreign exchange deposit maturity structure of loans; in view of the current situation, China-US spreads space is narrow, the trend of RMB appreciation gradually weakened, fluctuation amplitude increases, this requires commercial banks early preparation, find the right channel investments in foreign currency assets.3in the unilateral RMB appreciation trend gradually over time, the fluctuation range of the yuan increases, the best choice is to try to suppress the commercial bank internal foreign currency position.4commercial banks should be rational use of forward contracts, options contracts and other financial derivatives to hedge its foreign currency assets.5for the commercial banks to expand overseas increase the commercial bank foreign currency assets scale is the capital conversion risk a good choice.6commercial banks as soon as possible with foreign financing channels, improve the corresponding service level and the corresponding risk control in construction.After the analysis of the system and technology of the foreign exchange rate risk management of commercial banks, puts forward some suggestions on China’s commercial banks deal with exchange rate risk:risk management all-round, the whole process, forming a strong risk management culture as soon as possible, make all the staff to establish the identity of the exchange rate risk, by updating the cultural concept of the exchange rate risk management throughout the whole process of the bank business. The board of directors and the senior leadership of the exchange rate risk management ability of commercial bank’s board of directors and the senior leadership to have an understanding of exchange rate risk in banks. Set up the exchange rate risk management system perfect, perfect risk management organization shall lead and control including the board of directors and senior managers of the effective. Establishing a clear division of the foreign exchange risk management authority and responsibility mechanism.In the daily exchange rate risk management process, using VAR, RAROC, pressure testing and other advanced risk measurement tools and methods. Efforts to develop a conform to the requirements of a more effective tool or model. Control to deal with foreign exchange settlement and sale business required various currency positions, promptly grasp the exchange rate and interest rate movements, all kinds of foreign currency funds daily adjustment of bank size. Increase new product development efforts, vigorously encourage and reward innovation and business. In South Asia, South America, Africa countries and the EU as a cross-border RMB trade settlement business focus development area. On the basis of effective control of the exchange rate risk, seize the opportunity to expand overseas branches of commercial banks. Provide financial services, when the enterprise in overseas expansion, commercial banks not only need to provide financing support, more need is to provide financial services.