Question 2: How to deal with interest rate risk?

Interest rate risk brings opportunities and challenges to individuals and enterprises. The opportunity is that if the market interest rate falls, the market value of financial instruments will rise, so that individuals or companies can benefit from it. On the other hand, the challenge is to balance the potential capital gains and possible capital losses, or the rising market interest rate will reduce the market value of financial instruments.

The following are several ways to avoid interest rate risk. First, try to hold bonds with short interest intervals, avoid holding zero coupon bond, and try to ensure that the bonds you hold pay coupon income in multiple periods. And try to hold short-term financial instruments, because as mentioned above, the risk of capital loss of short-term financial instruments is lower than that of long-term financial instruments.

However, the second method has three problems. First, if the yield curve is inclined upward, financial instruments with longer interest payment intervals are more likely to provide more income. This is because the interest payment interval will increase with the extension of the term when other factors remain unchanged. When the yield curve is normal, the longer the term, the higher the interest yield. If you only hold short-term financial instruments at this time, the income will be reduced. Two: the cost of short-term financial instruments in a state of non-stop trading will become very high. Completing these activities will cost investors a lot of opportunity costs and a lot of direct costs. And constantly buying and selling short-term financial instruments will bear great reinvestment risks. Third, supporting investors with short-term financial instruments has lost the benefits of portfolio diversification.

Second, the hedging strategy is to use financial instruments to hedge interest rate risk. Market interest rates and exchange rates have been changing. Only when the holders of financial instruments meet two key conditions can they hedge the portfolio risk. One is flexible enough to deal with all kinds of situations, and the other is able to handle necessary affairs quickly.

Question 3: What are the effective methods for banks to guard against interest rate risk, and what are the measures to guard against interest rate risk and liquidity risk? 2.2. 1 Establish a sound internal risk management mechanism. The improvement of risk management mechanism is mainly to innovate the fund management system and change the long-term practice of state-owned commercial banks. ...

Question 4: How to prevent bond interest rate risk 10 interest rate risk prevention methods:

Diversified investment in bonds issued by issuers with different maturities, varieties and industries can effectively prevent the risk of interest rate reinvestment.

Question 5: How to use forward interest rate agreement to prevent interest rate risk? The forward interest rate agreement can literally guess most of the meaning. An agreement signed by both parties for the purpose of speculating on future interest rate fluctuations in order to avoid losses caused by future interest rate fluctuations. Forward interest rate agreement is a kind of forward-to-forward loan with fixed interest rate, but there is no actual loan payment. Forward interest rate agreement is an agreement or agreement that both parties want to adjust interest rate risk. One party is defined as the buyer of the forward interest rate agreement and the other party is defined as the seller. The seller promised to lend the buyer a certain amount of money in name. Here, buying and selling has nothing to do with the people (banks) who provide this service. They are only nominal borrowers and lenders. The buyer may have actual borrowing needs, so he buys FRA to hedge the demand. Of course, the buyer can also buy FRA just to speculate on the change of interest rate without actual loan arrangement. The seller is a nominal lender and wants to fix the interest rate of loan or investment, and FRA is a kind of protection for its interest rate. If the interest rate rises, the seller will suffer losses and pay the buyer cash.

The seller can also be an actual speculator who has suffered losses due to rising interest rates. He is just a speculator and will speculate at interest rates.

1. This nominal loan refers to a specific currency and a specific amount, which can only be withdrawn on a specific date in the future and will last for a period of time. Most importantly, the nominal loan will have a fixed interest rate, which was determined by both parties as early as the signing of the forward interest rate agreement. In FRA, although there is no actual loan, buyers and sellers still need to refer to the market interest rate and the agreed interest rate in the future to settle the whole contract. The settlement amount is the amount that one party compensates the other party.

2. In a standard interest rate agreement: (1) The buyer promises to borrow money in name; (2) The seller promises to get a loan in name; (3) Nominal principal with a specified amount; (4) Pricing in a certain currency; (5) Fixed interest rate; (6) there is a specific time limit; (7) It will be implemented on the date agreed by both parties in the future.

3. Buyer's intention: The buyer is a nominal borrower, and his loan is not affected by the increase of interest rate. Of course, if the market interest rate drops, he must also pay according to the established interest rate. Buyers may be real borrowers. Of course, the buyer may also be a speculator who uses the forward interest rate agreement.

4. Seller's intention: The seller is also a nominal lender, and he also fixed the interest rate of loans or investments. Therefore, the seller is protected by falling interest rates. Of course, when the interest rate rises, he must also lend at the established interest rate. The seller may be an investor who is worried about the loss caused by the future interest rate drop, or a speculator who has no real position and just wants to profit from the interest rate drop.

It is very important to understand that the forward interest rate agreement transaction is nominal because it does not actually borrow money. Although one or both parties actually borrow or invest, they must make other arrangements. The forward interest rate agreement can only avoid the risk of interest rate fluctuation, which is realized by paying the cash delivery amount, which is the difference between the interest rate agreed in the forward interest rate agreement and the market interest rate on the agreement date.

6. Example: Suppose a company expects to borrow 6,543,800 yuan in the next three months with a term of six months. For simplicity, we assume that borrowers will be able to raise funds at the level of LIBOR (London Interbank Offered Rate), which is currently about 6%. Borrowers are worried that the market interest rate will rise in the next three months. If the borrower does nothing, he may pay a higher interest rate when borrowing within three months. In order to avoid this interest rate risk, the borrower can buy a forward interest rate agreement today, with a term of six months and valid for three months from now, referred to as 3×9 forward interest rate agreement for short. At this time, the bank can quote such an agreement at the interest rate of 6.25%, so that the borrower can lock in the borrowing cost at the interest rate of 6.25%. Now suppose that the market interest rate rises to 7% after 3 months. If there is no forward interest rate agreement, borrowers will have to borrow at the market interest rate, that is, 7%. After borrowing it for six months, he has to pay back an extra $3,750 [1 0,000,000× (7%-6.25%) =10,000,000× 0.0075 ... >; & gt

Question 6: How do banks deal with risks? Commercial banks are high-debt and high-risk industries based on credit and mainly engaged in currency lending and settlement business. The operating characteristics of commercial banks and their key position and role in a country's national economy lead to the characteristics of concealment and diffusion of bank operating risks. Once the operational risk of a bank is converted into actual loss, it may not only lead to the bankruptcy of the bank, but also have a domino effect on the whole national economy. Therefore, it is more important for commercial banks to establish an effective risk prevention and control mechanism.

China's state-owned specialized banks have completed the transition process to state-owned commercial banks, and the market-oriented components of their operations have increased, while the administrative color has faded. Especially in the current global economic integration, the frequent international financial crises and the impact of international banking after China's entry into WTO require state-owned commercial banks to face up to operational risks and improve their risk identification and control capabilities as soon as possible. At present, China lacks a perfect social credit system, the property right system of commercial banks is unclear, the advanced scientific management mechanism has not yet been formed, and the cost of economic system transition has been passed on, which leads to a big gap between the risk management level of state-owned commercial banks in China and the international advanced risk management level, and there is also a big deviation in understanding.

In order to establish an effective risk prevention and management mechanism, we must first establish an advanced concept of bank risk management. The task of risk management is to find the risk points of business process, measure the risk degree of business, and create benefits from risk management while overcoming risks. Secondly, it is necessary to establish a comprehensive risk management method, and bring credit risk, market risk and various other risks, as well as various financial assets and other asset combinations including these risks, as well as various business units undertaking these risks into a unified system, measure and sum all kinds of risks according to unified standards, and control and manage risks according to the relevance of various businesses. Third, improve the risk management system. It should be adjusted from three levels: (1) It should adapt to the changes in the ownership structure of commercial banks and gradually establish the risk management organizational structure under the management of the board of directors. (2) At the implementation level of risk management, we should change the administrative management mode, gradually realize the horizontal extension and vertical management of risk management, and realize the flattening of management process on the basis of matrix management. (3) Change the traditional internal management mode of commercial banks, realize a management system centered on business processes, and constantly explore a risk management system centered on strategic business entities. It is necessary to gradually establish a separate risk management department in the business department, and transfer and implement risk management policies among departments through the risk management department to effectively control the source of business risks. Finally, we should improve the risk management technology. Use advanced risk measurement and management techniques, such as internal rating method and portfolio management.

The management of specific risks should start from the following aspects:

First, the prevention of credit risk.

Credit assets account for a large proportion in the whole asset structure. With the acceleration of interest rate marketization, the spread may become smaller, but it is still the project with the highest income and the main channel for banks to use funds. On the basis of strengthening pre-lending investigation and pre-lending review, the focus of credit risk prevention should be: (1) Using international advanced technology and experience, the internal rating system and risk model of bank credit that meet international standards should be established as soon as possible. Using quantitative methods to accurately price risks can not only improve the efficiency of asset business, but also set different asset prices according to different risk categories of assets, which can not only reduce credit risk, but also improve bank profits and expand market share through product differentiation. (2) Establish a sound internal control mechanism and incentive mechanism, strictly control the process of asset business such as loans, and clarify the relationship between responsibility and income, such as implementing post-loan accountability system and separating loans from audits. (3) Make full use of scientific and technological information means, establish and improve the credit risk monitoring information system as soon as possible, establish the basic customer database and develop the customer tracking system to realize the dynamic management of credit risk. (4) By comparing the opportunity cost of asset investment schemes, we choose the timely exit strategy to achieve the best asset allocation effect. (5) Reduce and control credit risk by using emerging tools and technologies, and establish a scientific performance evaluation system. Loan securitization and credit derivatives are mainly used to recover bonds in advance, transfer credit risks, and establish a performance appraisal system to realize risk portfolio management.

Second, guard against interest rate risk and liquidity risk.

1. Establish a sound internal risk management mechanism. The perfection of risk management mechanism is mainly to innovate the fund management system and change the long-standing ...

Question 7: What is a financial instrument to avoid interest rate risk? Hello, classmate, I'm glad to answer your question!

Gao Dun Online School answers for you:

Financial instruments to avoid interest rate risk include floating certificates of deposit, futures, interest rate options, interest rate exchange rate and interest rate ceiling.

Interest rate risk is one of the main financial risks of banks. Because there are many factors that affect interest rate changes, it is difficult to predict interest rate changes. One of the key points in daily management of banks is how to control interest rate risk. The management of interest rate risk depends to a great extent on the management of banks' own deposit structure and the use of some new financial instruments to avoid risks or try to benefit from them.

Risk management is one of the core contents of modern commercial bank management. With the advancement of interest rate marketization, interest rate risk will also become one of the most important risks faced by commercial banks in China. The interest rate risk management of western commercial banks has matured after long-term development. However, the long-term interest rate control has led to the insensitivity of China's commercial banks to interest rate changes, insufficient understanding of interest rate risks and relatively backward interest rate risk management. Therefore, how to prevent and resolve interest rate risk and effectively manage interest rate risk has become an urgent and important problem for commercial banks. The following Gao Dun Online School will introduce financial instruments to you!

Floating interest rate cd

Floating-rate certificates of deposit refer to certificates of deposit that calculate interest based on the interest rate of loans or bills with the same term in a certain period in the money market, plus a predetermined floating range. Banks can raise funds through floating interest rate certificates of deposit and benefit from the term structure of interest rates.

future

Futures is a financial contract, including the sale of financial instruments or physical goods to be delivered in the future (usually on a commodity exchange). The value of a futures contract to an index or commodity at a future date. Futures is a trading method that spans time. By signing a standardized contract (futures contract), the buyer and the seller agree to deliver a specified amount of spot at a specified time, price and other trading conditions. Usually, futures are traded on futures exchanges, but some futures contracts can be traded over the counter. Futures is a derivative financial commodity. According to the types of spot subject matter, futures can be divided into commodity futures and financial futures.

Interest rate swap

Interest rate swap refers to the exchange of interest income (expenditure) generated by the principal at one interest rate with the interest income (expenditure) generated by the other party at another interest rate on the basis of a certain nominal principal, and only the interest with different characteristics is exchanged, but not the real principal. Interest rate swap can take many forms, and the most common interest rate swap is to convert between fixed interest rate and floating interest rate.

Interest rate ceiling

The upper limit is the percentage that the state allows commercial banks to float above the benchmark interest rate. Because the state has stipulated the benchmark interest rate, commercial banks can fluctuate up and down the benchmark interest rate given by the central bank according to their own conditions, and the upper and lower limits are the range of interest rate fluctuations. For example, the benchmark interest rate is 5.58%, and the upper limit is 10%, which is 6. 138%, which is 5.58%×( 1+ 10%).

The interest rate ceiling refers to the agreement reached between the customer and the bank, which stipulates a market reference interest rate and determines an interest rate ceiling level. On this basis, the seller of the interest rate ceiling promises to the buyer that if the market reference interest rate is higher than the agreed interest rate ceiling level within the specified period, the seller will pay the difference between the market interest rate and the interest rate ceiling; If the market reference interest rate is lower than or equal to the upper limit of the agreed interest rate, the seller has no obligation to pay.

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Question 8: What is interest rate risk? What does interest rate risk mean? What is interest rate risk? What does interest rate risk mean? Interest rate risk refers to the risk that changes in interest rates lead to changes in bond prices and yields. Bonds are legal contracts, and the coupon rate of most bonds is fixed (except floating rate bills and hedge bonds). When the market interest rate rises, the bond price falls, which makes bondholders suffer losses in capital. Therefore, the longer the maturity of bonds purchased by investors, the greater the possibility of interest rate changes and the greater the interest rate risk. Fixed coupon rate bond prices are affected by changes in market interest rates. When the market interest rate rises, the value of bonds falls, and vice versa. This is because when the market interest rate rises, the original coupon rate of fixed coupon rate bonds is lower, so the attractiveness of cash flow to investors decreases, which leads to the decline of bond value. On the other hand, when the market interest rate drops, the fixed coupon rate will rise relatively, and the cash flow will be more attractive, so the bond value will rise. For investors, when buying bonds with a certain investment amount, when the market interest rate changes, the value of the bonds they invest will also change, resulting in uncertain risks. This kind of interest rate risk belongs to market risk, that is, the risk of bond market price uncertainty caused by the change of market interest rate. When coupon rate > market interest rate, the bond price > face value, then the bond is a premium bond. When the coupon rate is lower than the market interest rate, the bond price is lower than the face value, and then the bond is a discount bond. When coupon rate = market interest rate and bond price = denomination, the bond is a parity bond. The bond price is affected by the change of market interest rate by the following factors: 1, maturity date: the longer the maturity date, the higher the interest rate risk. 2. coupon rate: The lower the coupon rate (meaning long duration and long payback period), the higher the interest rate risk, and the highest the interest rate risk in zero coupon bond. 3. Is there an implied option? If the bond can be redeemed, the price will not exceed the redemption price, so the price is relatively certain. 4. yield to maturity: The lower the yield to maturity, the greater the interest rate risk. The relationship between bond price and yield to maturity is convex, so the price rises when yield to maturity falls and falls when yield to maturity rises. In particular, I want to talk about the risks of floating interest rate corporate bonds. As the coupon rate of floating rate corporate bonds is reset regularly, the risk of bond price will decrease as it approaches the face value. There are two units to measure interest rate risk: 1, and percentage of price change: the percentage of bond price change when interest rate changes 1%. 2. Price and amount change: When the interest rate changes 1%, the absolute value of bond price and amount changes. For the interest rate risk, we can take preventive measures such as dispersing the bond term and coordinating the long and short term. If interest rates rise, short-term investments can quickly find high-yield investment opportunities. If interest rates fall, long-term bonds can maintain high yields. In short, there is an old saying: Don't put all your eggs in one basket.

Question 9: How to analyze the interest rate risk of banks 1. The causes of interest rate risk in China's commercial banks.

Judging from the interest rate risk faced by China's commercial banks at present, the policy risk is far greater than other risks. There are three main reasons: First, policy factors have a great influence on the interest rate risk of commercial banks. At present, China's interest rate management authority is concentrated in the State Council, and the People's Bank of China only authorizes escrow institutions. Therefore, the State Council often considers the rise and fall of interest rates from a macro perspective. This policy orientation has been fully reflected in the eight interest rate cuts since 1996. This has produced some negative effects. For example, the loan interest rate is still at a low level, while the time deposits deposited with the rapid growth of savings deposits 1994- 1996 have reached the peak of redemption since 2000, and the high interest rate has caused a sharp decline in the profitability of commercial banks. This interest rate risk is often policy-oriented, and commercial banks can only passively accept it. Second, influenced by the imperfect social credit environment and national credit system, some monopolistic state-owned enterprises have become the focus of many commercial banks. These enterprises often take the preferential interest rate of 10% as an additional condition for financing, which has a great negative impact on the bank's income. Third, the deposit and loan business accounts for a large proportion of the total assets of commercial banks. Due to the strict separation of operations in China, the business structure is excessively concentrated on interest businesses such as deposits and loans, and financial product innovations such as non-interest income intermediary business and off-balance sheet business account for a low proportion in the business structure, which makes commercial banks suffer direct losses in interest rate adjustment.

Of course, the imbalance of assets and liabilities of commercial banks will also make commercial banks suffer from the risk of capital gap. First, there is no reasonable proportional relationship between the total assets and liabilities, the gap between deposits and loans is too large, and a large amount of funds are deposited in banks to bear risks; Second, in the term structure, the ratio of assets to liabilities is unbalanced. For example, short-term liabilities support long-term loans. When the interest rate rises, the cost of debt increases and the return on assets decreases. Third, in the interest rate structure, there is no reasonable spread between deposits and loans of the same term. For example, in order to compete for high-quality customers, the loan interest rate falls down without principle or even runs at a loss.

Second, the analysis of the current situation of interest rate risk in China's commercial banks

Interest rate risk refers to the potential impact on the operating income and net asset value of commercial banks due to the change of interest rate and the mismatch of assets and liabilities in a certain period of time. According to the Committee on Banking Supervision of the Bank for International Settlements, interest rate risk consists of two factors: investment risk and income risk. Investment risk refers to the possibility that interest rate changes will cause losses to fixed-rate assets and liabilities and off-balance-sheet projects; Income risk refers to the risk of income loss caused by the unsynchronized change of loan interest rate and loan interest rate. Interest rate risk management is an important part of assets and liabilities management of western commercial banks, and it is the main tool to increase bank operating income and stabilize bank market value. The Basel Committee on Banking Supervision divides interest rate risk into four categories: repricing risk, basis risk, yield curve risk and option risk. The following is a detailed analysis of the current situation of these four types of interest rate risks in China's commercial banks:

1. repricing risk

The so-called repricing risk refers to the risk caused by different maturity dates or repricing time of bank assets and liabilities. When analyzing this interest rate risk, we must analyze the assets and liabilities that may be affected by interest rate fluctuations, that is, analyze interest rate sensitive assets and interest rate sensitivity. The greater the gap between interest rate-sensitive assets and liabilities, the greater the repricing risk that banks bear. If interest-sensitive assets are greater than interest-sensitive liabilities, it is a positive gap, and commercial banks have interest rate risks when interest rates fall; On the contrary, it is a negative gap, and interest rate risks will arise when interest rates rise.

From the specific situation in China, since May 1996, the central bank has lowered the deposit and loan interest rates for eight consecutive times, and the deposit and loan interest rates in China have been in the downward channel for eight years. Since 2004, the macro-economy has been overheated, and the price has shifted from austerity to inflation. There are indications that China will enter a period of interest rate increase. Because China's commercial banks are mainly engaged in deposit and loan business, they gradually form the expectation of interest rate reduction in the process of continuous interest rate reduction, so the term structure of assets and liabilities has been mismatched, the interest rate sensitivity gap has been negative and has an increasing trend, and the proportion of long-term assets in assets is getting higher and higher. This gap state, which is highly adapted to the interest rate reduction cycle, will bring greater net interest income loss to banks when interest rates rise.

In addition, there is a structural mismatch between the maturity of assets and liabilities in Chinese commercial banks. The term of assets and liabilities is mainly determined by their payback period, which refers to the time when the principal of assets and liabilities finally returns. Without any special agreement, assets and liabilities can only be re-priced after the return period and before profits ... >>

Question 10: How to prevent systematic risks? The investment risks of Wang Shun Securities in the great era include systematic risks and unsystematic risks. According to the causes of risk formation, it can be divided into external factors and investors' own internal factors. The so-called systemic risk refers to the risk of investment loss caused by overvaluation of the overall value of the stock market and the risk caused by risk factors that can affect the whole financial market. These factors include economic cycle, changes in national macroeconomic policies and so on. Systematic risk is characterized by a general adverse impact on the whole stock market or most stocks. The consequences of systemic risk are universal, and its main feature is that almost all stocks fall, and investors often lose a lot. It is precisely because this kind of risk cannot be offset or eliminated by diversification that it is also called non-dispersible risk. Systematic risks are mainly caused by macro factors such as politics, economy and social environment, including policy risks, interest rate risks, purchasing power risks and market risks. 1, policy risk. * * * Changes in economic policies and management measures will affect the company's profits and investment income; Changes in securities trading policies can directly affect the price of securities. And some seemingly unrelated policy changes, such as private housing purchase policy, may also affect the relationship between capital supply and demand in the securities market. Therefore, the introduction or adjustment of economic policies and regulations will have a certain impact on the securities market. If this influence is greater, it will cause the overall market to move. 2. Interest rate risk. The change of market price is influenced by the level of market interest rate at any time. Generally speaking, when the market interest rate rises, it will have a certain impact on the supply and demand of stock market funds. 3. Purchasing power risk. Due to rising prices, the same money may not buy the same goods in the past. This price change leads to the uncertainty of the actual purchasing power of funds, which is called purchasing power risk, or inflation risk. In the securities market, because the return on investment in securities is paid in the form of money, in the period of inflation, the purchasing power of money declines, that is, the actual income of investment declines, and there is also the possibility of bringing losses to investors. 4. Market risk. Market risk is the most common and universal risk in securities investment activities, which is directly caused by the fluctuation of securities prices. When the overall market value is overvalued, the market risk will increase. For investors, systemic risks cannot be eliminated. Investors can't plan ahead through diversified portfolios, but they can reduce the impact of systemic risks by controlling the proportion of capital investment. For the prevention of systemic risks, we need to pay attention to the following aspects: First, we should improve our vigilance against systemic risks. When the overall market rises sharply, the volume of transactions has repeatedly hit a huge amount, the stock market has a widespread profit-making effect, the market popularity is bursting, investors are eager to enter the market, and investors' risk awareness is gradually indifferent, which is often a sign that systemic risks will appear. From the analysis of investment value, when the overall market value tends to be overestimated, investors must not relax their vigilance against systemic risks. Secondly, pay attention to controlling the proportion of capital investment. There are always uncertain factors in the operation of the stock market, and investors can constantly adjust the proportion of capital investment according to the stage of market development. As the current stock market has a large increase, from the perspective of effective risk control, investors should not adopt the method of heavy warehouse operation, and the Man Cang operation of all-in and all-out is even more inappropriate. In the meantime, it is necessary to control the proportion of capital investment within the acceptable risk range. Investors with heavy positions can selectively sell some stocks, lighten their positions, or use some investment funds for relatively safe investments, such as subscription of new shares. Finally, be prepared not to win or lose. Investors can't predict when systemic risks will occur, especially during the rapid market rise. If you sell your stock in advance, it often means that investors can't enjoy the opportunity of "crazy" market. At this time, investors can continue to hold shares under the premise of controlling their positions, but they should be prepared to take profits or stop losses at any time. Once there is systemic risk in the market, investors can decisively reduce their positions and sell them, thus preventing further losses. Sina statement: the content of this article is purely the author's personal opinion, which is for investors' reference only and does not constitute investment advice. Investors operate accordingly at their own risk.