The Research Of Foreign Exchange Risk Management In Commercial Banks Of China

After the 1990s, the trading amount in the international financial market increased sharply, at the same time, the pace of globalization of financial market accelerated obviously. Furthermore, with the further perfection of regulatory system about the international finances such as "Agreement of Basel", the foreign businesses of commercial bank developed at full speed. The internationalization of commercial banks'business has been being gradually a trend of development.However , changes of the international foreign exchange market aggravated and the exchange rates fluctuated more and more frequently. The birth of Euros and the fluctuation of Yen aggravated the volatility of the foreign exchange market. They made commercial banks face heavier risks. The exchange rate of RMB fluctuated more freely after the new reform,instead of pegging the Dollar singly last July. The central bank could transfer the foreign exchange risk through the expansion of the exchange rate flexibility to the residents, businesses and commercial banks.This reform of exchange rate will set higher requirements to the ability of exchange risk management in Chinese commercial banks. However, the foreign exchange risk management in Chinese commercial banks is comparatively at weak stage. At this moment, researching the current situation and the management of the foreign exchange risk has strategic meanings. In this case I do research on the foreign exchange risk management in our commercial banks systematically.The thesis consists of five parts: the first three parts introduce the general implications of the foreign exchange risk, the procedures and the methods of foreign exchange risk management in the western commercial banks, and the regulations of Basel Agreement about the risks management of foreign exchange. To further clarify the application of these methods, the article introduces the method of foreign exchange risk management in Standard Chartered Bank. On this basis, in the part IV I analyze the problems which the Chinese commercial banks have in foreign exchange risk management and the reasons. In the final part of the article I provide some specific problem-solving approaches.