Financial derivatives are the product of financial innovation, which can help managers of financial institutions to better control risks. The following is the strategic impact of the financial derivatives market that I have compiled for you. Welcome to read and browse.
Development history
In developed countries, the earliest financial derivatives are mainly foreign exchange contracts, followed by government bonds, interest rates, stocks and swaps, and finally credit derivatives are introduced. In some newly industrialized countries and regions, stock index futures mainly enter the market as their preferred derivatives.
At present, financial derivatives, which are mainly traded in the international capital market, have the greatest role in promoting the economy and finance, namely risk management. Specifically, financial derivatives can help enterprises or institutional investors avoid and manage systemic financial risks, enhance the anti-risk ability of the whole financial system, improve the overall efficiency of economic operation and broaden the scope of financial services. It can be seen that the risk management function of financial derivatives plays an important role in improving the national economy and financial system and preventing risks.
Financial derivatives refer to financial instruments whose value comes from the price of the underlying assets. Financial products are based on traditional financial products such as currency, bonds and stocks, and are characterized by leveraged credit transactions. Since 1980s, financial derivatives have changed with each passing day, and innovations in international financial markets have emerged one after another. The growth rate of financial derivatives market transactions greatly exceeds that of traditional financial products, and has gradually become an important part of the international market and a driving force for development. With the gradual opening of China's financial market, financial derivatives have become a very important part of the financial market because of their functions of avoiding risks and increasing returns.
China's financial derivatives market has just started, the on-market market has not been officially traded, and the off-market market is limited. In the early 1990s, the pilot of financial futures trading suffered setbacks, but in recent years, with the rapid growth of the national economy and the gradual maturity of the securities market, people gradually paid attention to the development of financial derivatives.
At the same time, the complexity and diversity of financial derivatives, as well as the superficial phenomena such as corporate crisis and market instability caused by financial derivatives transactions, will make people feel suspicious and dare not try. After fully considering China's national conditions, we can easily find a development path suitable for China's financial derivatives, that is, taking stock index futures as the main breakthrough, gradually developing other financial derivatives such as treasury bonds futures and interest rate futures, making full use of the advantages of backwardness and the role of the government, and gradually improving financial derivatives by following the forced evolution model.
development opportunity
Economic uncertainty or the rise of risk management coefficient will lead to a sharp increase in the development demand of derivatives market. With the deepening and development of reform, China's market economy system has been basically established. With the opening-up degree of China's economy, the penetration degree of the global market and the great improvement of the marketization degree of China's economy, the price changes of various commodities will be more frequent, faster and wider, which will greatly increase the uncertainty of the business environment.
At present, enterprises and financial institutions face three major problems: demand constraint, market competition and risk management, and the main function of financial derivatives market is to let market participants choose and manage risks. However, a series of risk-related problems caused by economic uncertainty have not attracted enough attention from enterprises, especially the role of futures market in risk management of most enterprises has not been correctly or fully recognized. For example, in 2000, PetroChina began to issue shares in the United States, and American investors raised more than 1000 questions, most of which were about how to manage the risk of oil prices. Therefore, without the development of financial derivatives and their awareness of application in risk management, the marketization and globalization of China's economy will not be easy to achieve.
In addition, the implementation of competitive mechanism and the increase of competitive pressure are the driving forces for the development of financial derivatives. China's economic opening is omni-directional, and so is the competitive pressure it faces. The development of financial derivatives market will effectively promote the further improvement of China's comprehensive international competitiveness. Therefore, we should make full use of the financial derivatives market to deepen the development of China's financial industry and improve its comprehensive competitiveness.
As far as the risk management function provided by the financial derivatives market is concerned, the continuous development of the financial derivatives market is bound to be the first choice for China's financial deepening development. Due to the rapid opening of China's financial services industry, China's financial industry is facing considerable competitive pressure. In the competitive strategy, we must improve the risk management ability and overall external competitiveness of financial institutions by developing the financial derivatives market. Financial derivatives market is of great strategic significance in building international financial centers and eliminating competition among international financial centers.
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