The Application Of Treasury Bond Futures To Interest Risk Management And Business Activities In Chinese Commercial Banks

Treasury Bond Futures is one kind of the most active and be most widely used Financial Futures. It is defined as a mature tools managing interest rate risk in the international market for financial assets of our banks and non-bank financial institutions. On September6,2013, China re-launched trade of its Treasury Bond Futures on the Shanghai-based CFFEX,18years after banning it following irregularity cases. Trading of Treasury Bond Futures will further help interest-rate liberalization and benefit China’s financial markets in the long run.Commercial banks are the largest holders of treasury bonds and the most important participant of bond market in China. Treasury holdings of Commercial banks face huge interest rate risk exposure, and our country accelerated the process of interest rate liberalization, which made the interest risk bigger. At the same time, interest rate liberalization also made great impact on traditional profit resource of commercial banks. Bond Futures provides a new tool to interest rate risk management in commercial banks, and can promote the innovation and transformation of its for-profit models. Therefore discusses how commercial banks use the Treasury Bond Futures has very important practical significance.The key clue of this paper is " what is Treasury Bond Futures-why commercial Banks to use it-how to use it". The ideas were divided into seven chapters: chapter1is introduction; Chapter2introduces the concept, development history, function and characteristics of Treasury Bond Futures, the analyzed how the commercial Banks in developed countries participate in Treasury Bond Futures trading; Chapter3discussed the reasons of commercial bank in our country to participate in Treasury Bond Futures trading; Chapter4to chapter6are application of Treasury Bond Futures trading strategies; Chapter7is the summary and research prospects.Based on the above research and analysis, this paper argues that the current financial market environment provides favorable conditions for Treasury Bond Futures running, and the commercial Banks also have wide demanding for Treasury Bond Futures. According to the international experience actual needs and requirements for the safety of Chinese commercial banks, there are several forms for commercial banks to participate in Bond Futures market in the future: one is to use hedging strategy to hedge interest rate risk; Second, using Treasury Bond Futures arbitrage trading to get low risk arbitrage profits; Three is to use the Treasury futures promote asset allocation efficiency; Four is to design Innovative financial products. In the actual operation, commercial banks should make full consideration to the various risk, establish perfect risk early warning and risk management mechanism.