Research On Risk Management Of Foreign Exchange Derivatives Of Commercial Bank In China

With the gradually deepening of the reform of RMB exchange rate regime and the unceasingly speeding up of capital convertibility project’s advancement,the market of Chinese foreign exchange derivatives has been developing at a rapid speed.Facing the rapid development of the national economy and the continuous opening of the financial market,more and more commercial banks in our country began to select foreign exchange derivatives to hedge foreign exchange risk.look for new profit growth point and increase the competitiveness between domestic and foreign markets.But that,the use of foreign exchange derivatives also accompanied by a huge risk.Due to the improper selection of foreign exchange derivatives or the lack of risk management system and measure,the big loss cases,even bankruptcy of commercial banks in domestic and foreign markets occur frequently.Therefore,it is of certain practical significance to further strengthen the research about the risk management of foreign exchange derivatives in commercial banks of our country.Given this,this study has focused on the following points:first,on the basis of the participation structure in Chinese foreign exchange derivatives market,this article place Commercial Bank in China as the research object,and the risk management of foreign exchange derivatives as the research focus.Secondly,based on the research about the development present situation of foreign exchange derivatives in China,directly using theoretical specification analysis method,the problems existing in the risk management of foreign exchange derivatives of commercial bank in China are analyzed,from four aspects----the development scale of Chinese foreign exchange derivatives market,risk quantification method,contract pricing power and external supervision,and the corresponding discussion was made on the reasons of the problems.Thirdly,this paper aims at pointing out the common problems existed in our and foreign commercial banks,and gives some reference and inspiration,through analyzing the failure cases of risk management of foreign exchange derivatives in foreign commercial banks.At last,the paper comes to the conclusion:the problems existing in the risk management of foreign exchange derivatives of commercial bank in China,does not only exist in the bank level,the regulation of banks are also involved in,and even the development of the whole market of foreign exchange derivatives in China.According to the research conclusion,combined with the background of the development of foreign exchange derivatives in China,some countermeasures and suggestions are put forward aiming at strengthen the risk management of Chinese commercial bank’s foreign exchange derivatives,respectively from the four aspects of capital account opening,foreign exchange derivatives market development,the bank’s internal control and external supervision.