Risk Management And Application Bond Futures

As the Chinese economy continue to grow rapidly, the real economy is more and more depending on the development of financial economy. The financial market is playing a important role in assisting the real economy. The liberalization of interest rate is improving, and the investors are using more derivative tools to hedge the risks, assuring the value of their asset to be preserved or increased. Banks are important investors in the financial market, how to choose the correct financial tools to manage their assets is a very important problem which has attracted the attention from all sectors in the society. After the implementation of Treasury Bond Futures, the banks in China have to find a better way to utilize the Treasury Bond Futures to manage the risk exposures in their banks, which has become an vital problem for them. The utilization of Treasury Bond Futures can reduce the risks of price volatility in the market, improving the safety of Bank assets.The utilization of Treasury Bond Futures for the banks in China to preserve or increase the assets'value have to put the theory into practice. How to hedge the risks in the single asset or capital portfolio by the utilization of Treasury Bond Futures is a major problem this article has to solve. This article will use a commercial Bank as an case to do the empirical study, using various ways to calculate the results of hedging. And then this article will give policy suggestions to the bank to make better management of its asset.This article firstly described the background of the research, showing the meaning and necessity of the analysis. Then the article made a literature review on the previous research on this subject, showing the achievements and the failures of their research. This literature review can provide solid foundations for the further research of this article. Then this article introduced the interest rate risks which the banks are facing, providing the available policy tools for the banks to choose. After that the article use the asset of a commercial Bank to have a empirical analysis.This article tried to provide some policy suggestions for the banks, well at the same time, it also needed to make some improvements. As the market of Treasury Bond Futures continues to develop, more and more financial institutions will have better tools to hedge their risks, and the financial market will have a better and smooth development.