Icbc Jiangsu Branch Of The Use Of Financial Derivatives Practice

The financial derivative instrument (FDI) is a new thing in market economic system. It is the latest and fastest growing financial instrument in today's international financial market. Ever since it was born, FDI has become an effective means of decentralizing and transferring market risk of exchange rate and interest rate. FDI is widely used by commercial banks, at home and abroad, for Market risk management. China's financial derivatives markets development is still in its infancy. Because of lack of pricing power, currently, commercial banks' use of FDI is mainly about valet-based financial management. commercial banks do not have the ability to use FDI to avoid substantial interest rate risk. As China's market-oriented interest rate process continuously push forward and the commercial banks' skilled use of FDI, FDI will become an important means of circumventing interest rate risk. In light of the internationally frequent fluctuating interest rates and China's market-oriented interest rate process, this paper explores the developmental status of FDI in Industrial and Commercial Bank of China (ICBC) Jiangsu branch. Firstly, in order to illustrate the important FDI in ICBC Jiangsu branch's valet business, this paper introduces ICBC Jiangsu branch's concepts of derivatives business development, awareness of derivatives risk, and the gained experience in practice. Then, from the angle of risk management function of the financial derivative products, this paper discusses the necessity and urgency of deepening the development of FDI. Finally, based on current developmental status and external support conditions for future development, this paper suggests strategies for the further development of FDI under the conditions of market-oriented interest rates.