Financial derivatives; Financial derivatives market; financial innovation
Financial derivative is a kind of financial innovation that appeared in the financial wave in 1980s. Its rapid development makes it an important trading product in the international financial market. With the further opening of the market after China's entry into WTO, the openness of the financial industry has reached an unprecedented level. With the globalization and liberalization of finance, financial institutions in China are facing more severe financial risks. The high risk of financial derivatives makes the financial market more fragile. On the basis of increasing competition pressure and risks, it is an inevitable choice for the development of financial markets and financial institutions in China to promote the healthy development of financial derivatives market and further promote financial innovation.
1 financial derivatives
The concept and characteristics of financial derivatives. So far, there is no uniform definition of financial derivatives. Literally, financial derivatives are new financial products derived from basic financial products such as bank credit, bonds and stocks, which mainly include forward foreign currency or RMB foreign exchange transactions, futures transactions and foreign currency depreciation transactions. No matter what kind of financial derivatives, they all have the following characteristics:
Virtual. The ability of financial derivatives is worthless, it is only a voucher to obtain income, and its value is determined by the price of the underlying assets, which is relatively independent.
Leverage. The margin system is the same as that used in financial derivatives trading. In the financial derivatives market, both parties have to pay a certain margin. You can trade after paying the deposit. So this kind of transaction has a leverage effect. The amount of margin is inversely proportional to the leverage effect, while the risk is directly proportional to the leverage effect.
Risk. Because of its high leverage, it is risk concentration. The virtuality and unpredictability of derivatives make them more risky.
Contractual. Financial derivatives are an agreement between the two parties to a transaction in the future. The contract defines the rights and obligations of the trader in the future and has legal effect.
The development of financial derivatives in China. China's financial derivatives started late, and the real development began with the foreign exchange futures launched by 1992 in Shanghai. Since then, China's financial derivatives market has seen treasury bonds futures, stock index futures and other trading varieties. At the end of the 20th century, financial derivatives trading reached a crazy level. However, due to the abnormal market development, the 1995 327 Treasury bond futures event occurred, and the first financial earthquake broke out in China.
2/kloc-0 Since the beginning of the 20th century, due to the improvement of China's opening to the outside world, China's financial derivatives have had new development opportunities. China financial derivatives market was initially established in 2005. By 2009, the turnover of China futures market was close to 1000 billion, and financial derivatives trading developed rapidly.
2. Problems in the development of financial derivatives in China
The inherent defects of financial derivatives. Insufficient varieties of financial derivatives in China: the problems existing in the development of financial derivatives in China are first reflected in the lack of varieties of derivatives. Especially compared with the rich and diverse types of national financial derivatives, it is more diverse and homogeneous.
Financial derivatives in the international financial market include futures, exchange rates, stock options and interest rate forward contracts. There are not many kinds and quantities of domestic financial markets in China. For example, the Shanghai Stock Exchange only has convertible bonds and warrants. Lack of varieties hinders China's financial derivatives; The expansion of the field and the expansion of investment scale. The market of RMB derivatives is not active enough, and the participants of derivatives are not extensive enough, which restricts the development of financial derivatives market in China.
There are some defects in the design of financial derivatives in China: the unreasonable design of financial derivatives leads to a variety of products in practical application, but the risk has not shifted, but has expanded. This is determined by the characteristics of financial derivatives. The high homogeneity of China's financial derivatives in the financial market is also caused by unreasonable product design. Compared with foreign financial derivatives markets, there is a big gap in the design level of derivatives customized for customers in China. The products launched by domestic financial institutions are also highly homogeneous. The unreasonable product design is due to the lack of financial innovation ability and independent research and development ability in China.
There are defects in the supervision of financial derivatives: the main body of derivative supervision is scattered. Theoretically, the supervision of financial derivatives should be a three-level supervision system established by the government, industry associations and exchanges. However, when China's derivatives market was just established, the responsibilities of the regulatory authorities were not clearly defined, so we know that a perfect regulatory system has not yet been formed. Financial institutions manage financial derivatives from their own perspective, and the decentralized supervision subjects lead to uncoordinated and unstable policies and methods, which leads to low supervision efficiency.
The system of relevant laws and regulations is incomplete: law is the basis of supervision. At present, China's legislation on financial derivatives is relatively backward. First of all, from the development history, the current laws and regulations related to financial derivatives are formulated by various regulatory agencies according to specific financial derivatives, and there is a lack of unified regulatory laws and regulations to improve them. The interdisciplinary risks of financial derivatives make specific problems lack corresponding legal protection. Secondly, in the existing laws and regulations, most of them are restrictive provisions to encourage law teaching. Although these restrictive laws and regulations have played a positive role in preventing the spread of financial risks, they have also restricted the expansion and development of the derivatives market.
Problems in the financial derivatives market. Lack of market equilibrium price: China's financial market is still in its infancy. The price of most financial derivatives is far from the market equilibrium price. The price of financial derivatives is closely related to the price of basic financial products, and China has strict control over financial prices and foreign exchange, so the national policy dominates the price of financial derivatives to a great extent. Moreover, the RMB is not freely convertible under the current account, which leads to the price of derivatives being out of market control. The price difference between them has become the key to the competition of speculators, which has increased the financial risk to some extent.
The openness and transparency of information disclosure is not enough: for participants, accurate information is the prerequisite for making correct judgments. Therefore, the financial market must have a complete information disclosure system. China's current information disclosure lacks openness and transparency. Can not truly reflect the financial derivatives market. Therefore, investors can't make rational judgments and expectations on the market, which has played a negative role in the development of financial derivatives trading in China. Moreover, the transparent disclosure of information can reduce the investment risk of investors. If the wrong information leads to the wrong judgment of expectation, it will lead to serious losses and even endanger the financial system of the country.
The quality of market participants is not high: participants in financial markets are individuals or institutions. At present, the quality of participants in China's financial derivatives market is generally low. The expected judgment of financial derivatives lacks corresponding theoretical knowledge and rational judgment, and blind investment and follow-up behavior aggravate the instability and risk of China's financial derivatives market.
3. Overcome the defects of China's financial derivatives and study new development countermeasures.