Bank Of China Risk Management Of’Derivatives About Foreign Debt Value-Keeping

After joining WTO, domestic financial market opens our country to the outside world in course of step by step to international market. The state-owned commercial bank is confronted with the significant turn around rescinding a prohibition all around. Finance derivatives become new field in commercial bank. Free interest rate and exchange rate fluctuation is bound to be uncertainty in enterprise cost. Though this risk is unable die out completely, we can take active attitude, then disperse and offset the risk by financial derivatives. Foreign debt value-keeping also calls foreign debt risk administration, which is to make use of finance derive from risk of exchange rate and interest rate. Then achieve value-keeping purpose.Bank of China is the first in the domestic debt hedging business of state-owned commercial banks, more than10years of operating results, belongs to the product category of financial derivatives, which is relating all kinds of financial derivatives in commercial bank. Value-keeping business of foreign debt can help enterprise to administrate foreign debt risk, to escape from exchange rate risk and interest rate the risk, which is also help commercial bank to make profit. Meanwhile, more and more people begin to be concern about the risk from financial derivatives as it develops in the whole world. Financial derivative is only a kind of late-model financial implement, being a kind of business means. Financial derivatives are not the wellhead of risk, whose risk does come from the applying and the management. Because the risk from value-keeping foreign debt business is objective reality, the main body of a book has brought the countermeasure.This paper expounds foreign debt value-keeping from four parts. First, introduce the foreign debt value-keeping businesses. And explains why should carry out it. Second, introduce the situation that domestic commercial Banks carries it. Third, this paper reveals the risks to carries out the business. Finally, put forward countermeasures to avoid the risks, Specific measures include:the rich product line, flexible design; strengthening risk prevention, standard bank operation; complete internal control, strengthen regulation.