Interest Rate Swaps (irs) And Analysis In China

Interest rate swap is one of the most important financial innovation instruments within the swap category. It emerged together with the trend of globalization of financial market, and with the trend of increase of financial risk. Interest rate swap is widely applied to minimize the risk of interest and foreign exchange, to save financing cost and to enhance the management of asset and liability. Together with the trend that China' s banking industry will open to the world in all aspects according to the rules of WTO, the domestic financial market will develop further towards the goal of less regulation. At that time, the potential risk within China' s economy will be released totally. In order to enhance the efficiency and stability of China' s financial market, it will be critical to have a good knowledge of interest rate swap, to have a mature interest rate swap market and professional traders, to have reasonable models for risk management. Interest rate swap not only provides an efficient instrument of management of asset and liability for financial institutes and enterprises, but also improves the liquidity and power of pricing of bond markets, provides an important hedging instrument for the innovation of others financial derivatives.