The Study Of Influence Of Financial Derivatives Tradings On China's Commercial Banks

Since the 1970 s,great changes had taken place in international financial market,foreign exchange rate risk and interest rate risk increased seriously.Companies met with more and more uninsurable risk in complex business environment,so they used derivatives as a main method to avoid risk.The demand for derivatives was increasing year by year.Since the derivatives were introduced in China in the 1990 s,they were developed well in China.Listed banks in China used derivatives more than other companies no matter in scale or in variety.Since the 1990 s,derivatives come into China,China's banking financial derivatives trading started late,the stage of development is still at the primary level,banking transactions in derivatives and risk control mechanisms for external supervision is relatively low.As derivatives play an important role in enhancing the overall competitiveness of the banking sector,the risks they bring up cannot be ignored,so the study of financial derivatives' influence on China's commercial banks is significantly important.Firstly,this paper analyzes the theoretical basis of the financial derivatives trading,and expounds the theoretical basis of the financial derivatives and the mechanism of the bank risk,followed by analysis of the current situation of China's banking derivatives trading,a detailed description of the background of China's commercial banking and financial derivatives trading,variety,size and problems.Our empirical analysis in this paper is based on a sample of 16 listed banks,making the regression results using panel data model,a positive correlation was found between the risk of banks listed banks and the use of financial derivatives,and financial derivatives trading increased the level of risk banks.Finally,this study gives some suggestions of the development of financial derivatives trading,from talent management,internal control and external supervision aspects relevant policy recommendations.