Government Regulation Of Financial Derivatives

Since the 1970s,the prominent phenomenon in the field of financial risk management is that financial derivatives deals are used widely. Although financial derivatives deals improve the validity and facility to manage the financial risk greatly they also bring new risks to users. The more serious fact is that they probably give rise to system risk in the financial market. It's necessary for government to regulate financial derivatives deals.This article analyzes the risks of financial derivatives deals and the correlative losing cases . Meanwhile it discusses the contents and mode of government regulation of financial derivatives deals with economic theories and explanation. It also discusses the development of financial derivatives deals in China and government regulation in the future.