A Study On The Impact Of Using Finance Derivatives’ On Listed Commercial Banks’ Performance

With the seriously fluctuating of the global commodity prices，interest rates andexchange rates in the past20years，enterprises produce motives and needs of riskavoiding. In order to meet the needs of avoiding the tax and financial regulation， thedeveloped countries have set off a wave of financial innovation， and the introductionand development of various financial derivatives is the most notably. Because of thedual characters that are leverage effete and low transaction cost of derivatives，whichcan be used to avoid the risk，the using of derivatives in enterprises in the world hasbeen rapid increasing. In2009， the International Swaps and Derivatives Association(ISDA) run a survey about the Fortune500companies’ usage of the derivatives. Theresult is，94.2%of companies use derivatives to manage the business and financialrisks， and only5.8%of the companies do not use derivatives. With the deepeningand widening of China’s opening up， China’s commercial banks concern usingderivatives to avoid risks more and more for their own development and the fact thatcompetition with foreign banks. However， finance derivative is also a double-edgedsword. As the spread of the financial crisis to the global， Lehman Brothers HoldingInc. and Merrill Lynch&Co. Inc. go into bankruptcy. These events result in that theacademe focus more emphases on the research of Finance Derivative.Under this background， this paper selects15China’s listed commercial banks forthe study sample， to study the impact of using the Finance Derivative to theirperformance empirically based on their2005-2010’s periodic financial reporting. Theresults of research show that， the use of Finance Derivative products listed onChina’s commercial banks have a role to enhance the performance. As for the China’sstate-owned commercial banks， the affect is in the improving their financialperformance directly， while as for China’s joint-stock and city commercial banks，more in the stability and enhance the market values. This paper argues that thisoutcome is due to China’s financial derivatives market is not developed，listedcommercial banks operating financial derivatives are not high， the impact ofaccounting measurement standards and commercial banks due to the different missionitself. Finally，targeted efforts put forward based on the conclusions results from theempirical analysis.