RMB Interest Rate Swap Pricing And Risk Management

The theme of this article is Interest rate swap, which was emerged in the late 1970s and early 1980s of 20th century. The collapse of the fixed exchange rate system and the floating exchange rate system make the interest rate and exchange rate fluctuations have become more frequent, in these circumstances, market participants hedging demand increased, the banking sector in order to reduce operating costs and avoid risk assets, ensure that the profitability of banks and security has been opening up new businesses, coupled with the role of science and technology to promote the emergence and development of financial derivatives, the fastest growing and most important is the Swap. In the swap business, the two most important tools are Interest rate swap and Currency swap. In 1976 emerged the first Currency exchange, Interest rate swap is later than Currency swap, but since 1981 emerged first Interest rate swap, the development of Interest rate swap is surprising. So far, the development of Interest rate swap has gone far beyond the Currency swap on speed and scale.Interest rate swap has been able to obtain such rapid development, because it has features such as lower financing costs, reduce financial risks, flexible and easy to operate. China is the key to financial reform, to research Interest rate swap is very important. On one hand, China is gradually opening up the financial, the participation in international competition in the financial services have become more frequently, and this requires that we must establish awareness to against financial risks, understanding and learn how to use prevailing financial instruments in the international financial markets, and learn how to use financial derivative products on its own debt capital for a reasonable; On the other hand, compare our banks with the foreign banks, is still stuck in the traditional business operate, so in order to compete with foreign banks, it is necessary to reform and innovation. Hence, launching Interest rate swap is the most suitable way.The experimental work of Interest rate swap in China is smoothly, but there are still some problems. In this article, based on the experimental work of the Interest rate swap in China, we study and discuss the pricing and function in Interest rate swap, the markets building and the risk management use the pricing methods and theoretical basis of foreign Interest rate swap. Financial engineering is a new science, material and information on domestic financial engineering is not very large, which makes the information in writing is limited, and besides knowledge is limited, inevitably there are some problems in this article, I urge teachers and students criticized this article.