Abstract: The global financial crisis spread, well-developed financial markets, time, financial instruments innovation is the business management should be considered an important factor. Deepening in corporate financial management in a new era of development, companies need to fully active in using financial instruments. Firstly, innovative financial instruments for financial management are outlined, derived using innovative financial instruments that can reduce or avoid the corporate financial risk in financing, financing for enterprises to provide a more effective and flexible ways to increase capital gains rate, reducing the cost of funding, up to defuse the corporate financial risk, improve levels of financing and promoting enterprise liquidity purposes.
Keywords: financial management of innovative financial instruments
Financial instruments Financial Management for enterprises to solve the problem provides a new way, is to improve financial returns, the primary means of avoiding financial risks. Innovative financial instruments include money and capital market instruments of innovation, payment and settlement tool innovation, innovation and other derivative financial instruments, financial management of the enterprise financial activities of investment, financing, distribution, has a pivotal role in operating activities. Particularly financial bonds, bank cards, corporate treasury, trade bonds, index futures, stocks, forex, options and futures, stock options and other financial instruments of the enterprise innovation financing, financing, reform of great significance.
First, an overview of innovative financial instruments
Innovative financial instruments refer to financial industry breakthrough in the traditional manner and scope of operations in the new financial shipped a new mechanism created by the new financial instruments.
Financial innovation is mainly the pursuit of corporate profit opportunities, through the re-combination of various financial elements, creating up a new 'production function' for including a variety of means of payment and settlement, financial instruments, financial regulation and organization system and other aspects of innovation. Financial innovation in promoting financial development, it will form a new financial risks, making the existing system of financial regulation and failure to improve financial supervision more difficult. The concept of financial innovation refers to the financial sector, through innovative changes and re-combination, the introduction of new things or to create a range of various elements. Narrow financial innovation in the financial business innovation, referring to the establishment of the Western developed countries in expanding the bank's condition, banning or slowdown on the bank's balance regulation, banning or control of foreign exchange and interest rate controls slowdown, promising non-bank financial institutions and Banks and other financial regulation implementation of business after the cross, to strengthen the various financial institutions compete with each other to produce a series of new trading tools and financial instruments.
Innovative financial instruments is to finance the development of the main trends in the business, by the late 1970s, the formation of the international financial markets innovative financial instruments wave impact so far. Than a single financial instrument gradual shift from cash, deposits, stocks, bonds, commercial paper and other changes into multiple variations, multi-purpose, multi-form and system of the species composition. Only the United States, Japan, mainly introduced hundreds of innovative financial instruments.
Second, corporate financial instruments, the basic idea of innovation
(A) to avoid the risk and insurance
One use of innovative financial instruments that are risk-averse, you can go through innovative financial instruments, to establish a new financial tools and products in order to achieve a reasonable tax hedge risk aversion overseas market regulation, and open overseas target market purposes. While innovative financial tools also have the role of insurance, the highest level of risk by locking with the lowest income, to preserve the company's future access to higher incomes. In the insurance and risk-averse in the form of innovative financial instruments, asset allocation and reconfiguration diversified portfolio of risks and rewards, to maximize economic efficiency of enterprises.
(Two) comparative advantage Swaps A swap is an innovative financial instruments comparative advantage thinking examples.
Enterprises through financial comparative advantages, to achieve a win-win or win-win financial activities. Meanwhile, innovative financial instruments but also to a certain extent to solve the problem of asymmetric information.
Innovative financial instruments, securities of the Company required by the special terms and conditions for the establishment of its signal display mechanism, improve the distribution of information structure, which can strengthen the efficiency of information transmission, to a certain extent, solve the problem of information asymmetry.
Third, innovative financial instruments in corporate financial management application
(A) financing behavior
The financing of enterprises, their bonds and common stock are the main types of innovation through innovative bond contract terms of equity instruments, debt equity conversion innovative financial tools, to a certain extent, solve the problem of corporate capital structure. Use of financial innovative financing to enable enterprises to significantly increase its financing capacity and flexibility to adjust its capital structure adjustment will benefit business capital chain management.
(Two) investment behavior
Enterprises in the financial investment, financial innovation can be used for different portfolios designed to meet financial derivative instruments, gains or zoom in risk aversion. In the strong liquidity and low risk short-term investment vehicles, repurchase agreements, is a good financial innovation. Enterprises can scroll the daily overnight repo operations, in order to maximize the utilization of funds. Kind in the investment field, companies can match derivatives such as futures or options hedging reached, reduce inventory risk, improve capital efficiency. In the field of project investment, companies with derivative instruments to reduce long-term investments, deferred decision uncertainty.
(Three) risk management practices
Modern businesses to face market risk, but also exposed to credit risk, China's financial market environment continues to develop and improve, credit risk has become more complex, gradual internationalization of the market risk in the use of innovative financial instruments to manage credit risk and Market risk has an increasingly important role. These market price fluctuations, the enterprise through currency futures, mutual exchanges, commodity swaps and commodity futures, forward rate agreements and the market price on the foreign exchange risk hedging transactions to reduce the volatility of cash flows in order to achieve the purpose of hedging. About credit risk, companies can take a new credit risk management tools and instruments, such as credit swaps, to the right portion of the receivables insurance, credit risk, etc. transfer risk event occurs, through insurance compensation to compensate for their losses.
Fourth, the use of innovative financial instruments to optimize enterprise financial management
In the core content of a global corporate financial management, corporate finance management and financial risk management objectives are targeted research on financial innovation, take the appropriate financial strategy, to optimize the financial management.
(A) optimize the financing of enterprises management Corporate finance in various ways, channels is very extensive, varied in different channels have different risks and financing costs.
With the continuous development of innovative financial instruments and international finance, corporate finance forms has become even more diverse. Enterprises can use innovative financial instruments to manage its financing. First, the establishment of a financial consortium financing. Through the development of long-term large-scale enterprises, to accelerate capital accumulation to increase the bank's funds to earn interest, so not only reduces the company's profits, but also affect the cash flow efficiency. In the United States, Japan and other countries, large enterprises have established appropriate business financial institutions, the formation of the consortium, the founder of Bank of enterprises to raise funds within a specific range of purposes, this self-rolling financing of investment, in order to improve the enterprise's use of funds efficiency brought high profit margins. Second, the use of financing options. Fixed number of stock options to buy shares means the price specified. These bonds have a certain equity and liabilities industry characteristics, in order to introduce a broader portfolio investors, and financial officers to expand corporate earnings, so lower its cost of capital resulting mix, stock options can also bring additional funding the exercise price is often higher than 10-30% of the stock market price of bond issuance date. Links to free download http://eng.hi138.com
(Two) optimize the company's financial risk management First, we must understand and be familiar with financial instruments, financial innovation as the key to the transformation of economic risk through financial instruments. General types of bonds, stocks, notes and other financial instruments in the financial markets to finance more, according to Lucian in 2010 in a survey on business financial innovation tools against foreign exchange risk is far more applications period and about foreign exchange, interest rate risk is more about the exchange rate, commodity price risk on commodity options and commodity futures on equity risk is mainly the corresponding OTC options. Thus, risk management and financial instruments is the exact relationship between innovative financial products, accompanied by various derivative financial instruments generation and the development of financial futures markets, foreign exchange forward contracts, interest rate and currency swaps, options, futures, index trading and other numerous, so enterprises should grasp and financial managers understand these financial innovations to meet business needs.
Secondly, the use of appropriate financial instruments within the scope of innovation. Each one innovative financial instruments, when the benefits to the enterprise, while also accompanied by risks, including financial risks. If suddenly a lot of self-control beyond the scope of the risks of engaging in their own trading operations, the complexity of the financial innovation beyond its ability to handle the existing problems in the enterprise financial products transactions over time, had to do with high-risk transactions , eventually leading to bankruptcy. Therefore, based on its carrying capacity of enterprises, to the extent appropriate for the application of innovative financial instruments, weigh the benefits and risks of a one-stop provider of innovative financial tools to optimize financial management.
Third, enterprises should strengthen liquidity management, attention to internal conversion of fund management. Through dividends, royalties, the original investment, import and export goods transferred back loans and financial intermediaries manage and guide the internal funds transfer. The rational allocation of funds, enabling enterprises to efficiently and rapidly implement control systems of all funds and the Global Fund, and optimize the use of reserve status.
Finally, companies in the application of innovative financial instruments, it should adhere to the industrial capital and financial capital interpenetration policy, while the banking and enterprise development. Business enterprises to participate in market competition, from bank credit and financial support are inseparable, business development and growth is inseparable from the support of all major banks, combined with the industry and finance, effectively guard against financial risk business risk and strengthen enterprises to participate in market competition.
In conclusion, the use of innovative financial instruments to optimize the financial management, analysis of innovative financial instruments impact on corporate financial management, is a new era of modern business research a new topic, there are developed areas of research and development of its objectivity. But the innovative financial instruments to China not long accumulated experience is still limited, the face of increasingly severe fiscal situation, innovative financial instruments to strengthen financial management in the enterprise's status is important.
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