The Research On Foreign Exchange Risk Management In Commercial Banks

Presently Chinese Yuan's price has been fluctuated in both sides depending on markets' supplies and requirements.Chinese Yuan will face more severe competition after China open capital amount.Chinese-funded banks have long been weakness system construction and lack trading and management experience on foreign exchange area.It has become a severe subject for Chinese-funded commercial banks need to research.This thesis studies about how to improve the standard of Chinese-funded banks' foreign exchange risk management.It's mainly illustrated by importance of improving system construction.The method of illustration includes case studies and theoretical studies.Through the real cases it will testify enhancing system processing capability will obviously decrease operational risk.System capability is also the precondition of implementing delicacy management which will become a core capability in business competition,for example to give good credit quality customers for better price.This thesis will expand this topic by theoretical study.In this thesis data were mainly came from real business systems.For example,EBS data state the importance for Chinese-funded banks to increase the investment on intelligent foreign exchange trade.From analyzing on operational risk's distribution,we can get the conclusion that foreign exchange trades cannot live without the auto-deal-booking mechanism.It's the most available method to advance deals' efficiency.On the conclusion,Chinese-funded banks have weakness in system construction on many respects.It cannot satisfy basic routine requirements and also stop the implementation on delicacy management.Routine management requirement needs system could not only run smoothly from sales system to accounting system,but also from branches to head office.It is the precondition of accuracy management on market risk.Moreover,only with solid system a bank could advance on capability on foreign exchange price quotation so that to let good quality customer could get better price.Risk management also cannot live without reliable system which will straightly bring benefits on reducing operational risk and provide an upfront and efficient mechanism for risk management.In brief,it's really necessary to enhance system construction for Chinese-funded banks.Hope the suggestions could help Chinese-funded commercial banks well improve their system construction and delicacy management in foreign exchange markets.