Commercial banks in western countries will inevitably have an imbalance in buying and selling foreign exchange in their foreign exchange business. If you sell more than you buy, it is an "empty position"; If you buy more than you sell, it's a bull.
And discount: in the foreign exchange market, according to the delivery time of foreign exchange transactions, the exchange rate is divided into spot exchange rate and forward exchange rate. When determining the forward exchange rate, the trend of the exchange rate is analyzed to determine whether it is rising or falling. If the forward exchange rate is more expensive than the spot exchange rate, it is a premium, otherwise it is a discount, and the corresponding rising and falling prices are the premium amount and the discount amount.
commercial bank
The concept of commercial banks is different from that of central banks and investment banks. It is a financial institution with profit as its function, raising funds with various financial liabilities and operating with various financial assets.
General commercial banks have no right to issue currency. Traditional commercial banks mainly focus on deposit and loan (borrowing) business, that is, borrowing deposits at lower interest rates and lending loans at higher interest rates. The deposit-loan spread is the main profit of commercial banks.
The main business scope of commercial banks includes absorbing deposits from the public, enterprises and institutions, issuing loans, discounting bills and intermediary business. It is a savings institution, not an investment institution.
China Commercial Bank can engage in the following businesses: absorbing public deposits and issuing loans; Handling domestic and overseas settlement, bill discount and issuance of financial bonds; Acting as an agent to issue, honor and underwrite government bonds and buy and sell government bonds; Engage in interbank lending; Buying and selling, acting as an agent to buy and sell foreign exchange; Providing letter of credit services and guarantees; Agency payment and insurance agency business, etc. According to the regulations, commercial banks are not allowed to engage in securities business and non-bank financial business other than government bonds.
All the books we contact in our life belong to commercial banks. China Commercial Bank is divided into large state-owned commercial banks, such as China Industrial and Commercial Bank, China Agricultural Bank, China Bank, China Construction Bank and Bank of Communications. Small and medium-sized commercial banks, such as China Merchants Bank, Shanghai Pudong Development Bank, China CITIC Bank, China Everbright Bank and Huaxia Bank; City commercial banks, such as Bank of Beijing, Bank of Nanjing, Bank of Ningbo, etc. Rural commercial banks, such as Beijing Rural Commercial Bank, Shanghai Rural Commercial Bank and Chongqing Rural Commercial Bank.
Judging from the development of commercial banks, there are two business models of commercial banks.
One is the British model. Commercial banks mainly finance short-term commercial funds, which have the characteristics of short lending period and high liquidity.
That is, borrowing deposits at a lower interest rate and lending them at a higher interest rate. The deposit-loan spread is the main profit of commercial banks. This business model is relatively safe and reliable for banks.
The other one is from Germany, and its business is comprehensive. Commercial banks not only finance short-term commercial funds, but also finance long-term fixed capital, that is, engage in investment banking business.