Research On The South Korea Financial Derivatives Market

Financial derivatives originally appeared in the1970s, it’s appears on the financial andeconomic activities are taking extendsive and promotive roles. For most Chinese, the conceptof financial derivatives are unfamiliar, not to mention the use of financial derivativesselectively to reduce the risk and maximize the return on investment. Financial derivatives, inshort, are more flexible and diverse forms of contract. Companys can transfer their own riskthrough financial derivatives market to intentional operators who are chase high benefitthrough high risk.The degree of perfection of the financial derivatives market is also a measurement of afinancial market integrity and maturity for a country. For any country, the development offinancial market is along with the financial derivatives market development. The process forthe improvement of the financial markets enhance the operational efficiency and has a veryimportant practical significance. This study can enrich our financial markets theory to acertain extent and improve China’s socialist market economy under the financial derivatives.And it is also provide a theoretical support. Although the establishing of Korea’s financialderivatives market is later than that of the United States and although have learnt from theU.S. financial model, but South Korea have started from their own actual situation, the actualneeds of the domestic market and the overall development financial products to developderivative products. After the downturn of the early periods, South Korea now becomeworldwide financial products and derivatives trading center.The end of the last century, the Korean economy was slow and brought a certainnegative impact on sales and distribution of financial products to a large extent, but on thewhole, the financial derivatives trading volume has remained at a high level. In recent years,although the worldwide financial crisis is disastrous, it’s impact to South Korea is relativelysmall. So it is necessary to study the financial derivatives market in South Korea.This thesis uses an empirical and normative analysis method and combined researchmethods and collection of information methods too. After studying domestic and internationaleconomic environment, including political and legal environment, economic environment,social and cultural environment and technical environment, investigating and researching the best way for China financial derivatives market. The market environment including themarket development status, characteristics, existing problems and development trend,andresearch of domestic market management as well as analyzing the south korea’s financialderivatives market. Last but not least, by studying the link between the existing resources andexternal environment, combining all the above results together, we can finally generate thedevelopment strategy for the China financial derivates market.This thesis consists of six parts: the first part is introduction，including the backgroundinformation, the research goal and the significance, domestic and international research trends,research ideas and methods,and the possible innovation; the second part is related theoryexplained on financial derivates market about South Korea,; the third part is to analyze theSouth Korea financial marget set up and developong; the fourth part is to comparation ofChina and Korean financil derivates market and gorvenment control on the marekt; the fifthpart puts the shortcome of South Korea financiel dereivetives market and tell us what shouldChina market should overcom; the sixth part is the conclusion, summarizes the theopportunities and threats, advantages and disadvantages that the market facing and the wayfor us to go on.This study maily focused on the formation process of the Korean financial derivatives,especially in the exposition of the laws and regulations in this process, which is innovative incertain grade. Through this study, the characteristics of the Korean financial derivativesmarkets is analysised in-depth. For which the existence of problems such as over-reliance onthe of financial derivatives, the overall financial markets into the standards are too loose andso causes the development of the Korean financial derivatives market is slow, and put forwardtheir own views, and as a basis for China’s financial derivatives to build and perfect thecomments and suggestions.China is in it’s economic developing period, so many shortcomings in many areas, Inorder to establish and improve better financial derivatives market to enchance ongoingdevelopment fo market function, many works to need. Such as improve informationtransparence, draft market related law and rules. And also improve the function of therelated association.Since I am a new learner for finance and in the beginning period, and further more thefinancial derivatives is not familiar in China and the research work is also in the start upperiod, the paper has many shortcomings, so many advises are needed and many thanks toprofessors.