A Study On The Impact Of Financial Derivatives Trading On Banking Risks And Profits Of Listed Banks And Xiamen Banks In China

The Bretton Woods system,in which the dollar is linked to gold and the currencies of the agreement countries are linked to the dollar,has completely collapsed in the 1970s.Western countries allow market prices such as interest rates and exchange rates to fluctuate more.Exchange rate,interest rate and other financial prices entered into unpredictable fluctuations,financial institutions urgently need to avoid market risks,thus financial derivatives came into the world,such as forward,futures,options and swaps,which can not only avoid risks,but also make profits from investment.Because of its flexible trading advantages and personalized trading characteristics,it had also achieved unprecedented prosperity at this time.In China,commercial banks are also facing tremendous changes.With the deepening reform of the financial industry,developing financial derivatives business can not only avoid interest rate risk and exchange rate risk faced by banks through hedging,but also increase non-interest income for banks through speculative arbitrage,which is an important direction of future business transformation of banks.Firstly,the paper combs the influence of financial derivatives on the governance effectiveness of banks before,then introduces the basic knowledge of financial derivatives,extends the characteristics of financial derivatives,and describes the operation status and data of financial derivatives at home and abroad.On this basis,the paper studies the derivatives trading of 16 listed commercial banks in China,and analyses the impact of financial derivatives to risk control and profitability of these banks.The research shows that:in the aspect of risk defense,from the overall sample,the use of financial derivatives aggravates the risk level of banks;in the aspect of performance improvement,from the sample data,the use of financial derivatives will reduce the profitability level of banks;and the main reason why financial derivatives can not play the role of risk hedging and speculative profitability is that,China's infrastructure is weak and the system development is imperfect at present;the transformation of the real economy is facing challenges,the degree of financial spot development is insufficient;the market participants are single,and the terminal demand is insufficient.Then,according to the results of empirical analysis,the paper inspects Xiamen bank with the qualifications of derivatives trading,and puts forward several suggestions:Strengthen the internal control system,guard against internal risks;enrich the derivatives trading varieties,enhance the ability to obtain profits;develop financial spot steadily to ensure that financial derivatives play the greatest role;train professional talents to maximize the effectiveness of derivatives.Finally,the paper summarizes the above analysis and puts forward some suggestions to give full play to the effectiveness of financial derivatives in China:improving infrastructure construction;strengthening the innovation of financial derivatives;promoting the diversification of market participants;and enhancing the linkage between financial derivatives market and financial spot market.