Research On China's Swaps Market Development

As a new emerging financial derivative instrument, since 1980s, Swap has become one of the most popular instruments of derivative. For it has very helpful functions such as avoid risks including interest-rate risk and exchange-rate risk, evade form foreign exchange regularity, decrease the cost of financing ,manage the Asset-Liability.Since the late of 1980s, swaps raised very fast in developed countries. Particular in terms of transaction scales, swap market increased explosively. According to the data issued by ISDA, only in 1997, the transaction scales in swap market reached to 24,110 Billion $. It makes swap market become the most important part of the Financial Derivatives Product. For every countries' economic development, each of governments, enterprises and financial institutions will face the same questions such as decreasing the risk of interest-rate and exchange-rate, enlarging financing channels, reducing financing costs, adjusting Asset-Liability structure, and so on. As a new kind of financial Derivatives Product, swaps will exactly meet the requirements of governments, enterprises and financial instructions in these aspects.As deepening of China's reform of financial environments, interest-rate and exchange-rate begin to realize market-based mechanism,computer and internet techniques spread very fast. It is not only possible but necessary for China to develop swaps. Swaps will play very important roles in many fields, like Asset-Liability management of financial institutions and enterprises, risk management of foreign bonds, foreign exchange reserves, loan interest-rate, foreign currency exchange rates, After China's entering WTO, financial environment has changes largely. Domestic financing market becomes more deregulation and openness. Financial Derivatives Product market will surely open, learn and grasp the derivative instrument of swaps. For the development of China's economy, it has very important sense.