Recently, affected by the global financial crisis triggered by the U.S. subprime mortgage crisis, a considerable number of parent companies of foreign financial institutions in China have been severely affected. During the evolution of the financial crisis, many companies in China have Foreign financial institutions have also undergone corresponding changes in their trading strategies and behaviors in the inter-bank bond market.
Overview of transactions of foreign financial institutions in China in recent years
In recent years, with the rise of inter-bank trading products With the continuous enrichment of types, the transactions of foreign financial institutions in China are becoming increasingly active. As of the end of last year, there were a total of 281 foreign-funded financial institutions in China, including 79 foreign-funded banks and 202 foreign-funded or joint venture institutions.
Since 2005, the trading volume of foreign financial institutions in China in the major sub-markets of the inter-bank market has been increasing, mainly focusing on spot bonds, pledged repos and Interest rate swap market. Especially after the restructuring of foreign banks in April 2007, although the transaction concentration of foreign members has increased, it has not affected their transaction activity.
Take the most representative spot trading market as an example. From January 2005 to February 2007, the transaction volume of the spot bond market was always below 200 billion yuan. In March 2007, the transaction volume rose to 224.2 billion yuan, and then steadily increased to 1,031.4 billion yuan in March this year, accounting for the total market share. About 11.7% of the amount.
In addition, in the derivatives market represented by interest rate swaps and forward interest rate agreements, foreign financial institutions in China are major market participants, and market transactions The volume accounts for more than 50% of the total market volume.
Before the financial crisis deepened, the transactions of foreign financial institutions in China in my country's inter-bank market were not significantly affected, and transaction activity continued to increase. In the first half of last year, as the People's Bank of China continued to implement tight monetary policies, foreign financial institutions in China continued to withdraw funds from the bond market and opened a large number of interest rate swap positions. However, with the shift in monetary policy in the second half of the year and the rise in domestic bond market prices, foreign financial institutions in China became active again in the bond market, with transaction volumes rising steadily. At the same time, due to the internal control of various banks on derivatives risk exposures, the trading volume of interest rate swaps and other derivatives markets has decreased, and the "seesaw effect" in the bond market and interest rate swap market has emerged. Since the financial crisis deepened, foreign financial institutions in China were once unable to borrow monetary funds in the credit lending and pledged repurchase markets.Under the coordination of regulatory authorities, as the turmoil in the global financial market gradually calmed down, the negative impact of market members on its overseas parent company gradually faded, and the transactions of foreign financial institutions in China became active again.
In short, although the trading behavior of foreign financial institutions in China in the inter-bank market has been intermittently impacted by negative news about overseas parent companies, it is mainly affected by the domestic macroeconomic situation. , domestic financial market development level, monetary policy and fiscal policy and other factors have a greater impact, reflecting localized characteristics and independence.
Transactions of foreign financial institutions in China during the financial crisis
Based on the extent of the impact of the financial crisis, derivatives Product business development and other different conditions. We selected 15 foreign financial institutions in China as research samples, focusing on their transactions during the financial crisis. The specific list of sample institutions is shown in Table 1.
