Treasury bond futures on the restoration of our thinking about the problem

I. Introduction.

Treasury bond futures are a derivative instrument, means the buyers and sellers through an organized market place, the agreed specific time in the future, according to a predetermined price and quantity of delivery of the debt securities trading models, financial futures in interest rate futures are a species. in modern economic life, financial risk is always there, and bond futures can hedge to avoid or reduce risk, and thus become a risk management tool. On the other hand, the role of Treasury bond futures prices can be found in different economic agents to provide effective economic information, economic activities for the next step as a reference. is because bond futures important role in the economy, so the development of government bond futures market has become an important piece of economic development, subject to various economic agents attention.

China in December 1992 in order to mobilize the investment climate in the bond market pioneered by the Shanghai Stock Exchange, the standardization of bond futures contracts, which marks the beginning of our financial futures. However, due to the lack of a number of objective conditions and in the System sound and other issues, after more than two years after the attempt, May 17, 1995, the Treasury futures market often foul the CSRC finally showed the "red card" to a <"On the suspension of the pilot bond futures emergency notification>> sent off outside.

Second, the literature review.

95 years from now more than ten years time, all walks of life have a profound bond futures thinking, on whether to resume bond futures also have different views on this issue.

(- Support the restart condition has been with Treasury futures, "to promote" faction.

Renmin University of China, Deputy Director of Finance and Securities Research Institute, Zhao Xijun In "<should be re-bond futures>> One article said:" The bond issuance and trading of large-scale growth, accelerate forward interest rate market, institutional investors have in the quantity and quality greatly improved, and futures market regulatory environment has been significantly improved, the conditions for the introduction of bond futures in China have a solid foundation. " Shanghai University of Finance and Xu Shoufu in his <<Feasibility of recovery of Treasury bond futures>> pointed out: "China's current economic form has shrunk, interest rate futures market into the bond provides the necessary conditions for the recovery, the vigorous development of the spot bond futures for the recovery of debt has provided a solid foundation, and the continuous commodity futures development of the recovery of Treasury bond futures provide valuable experience for reference, commodity futures market continues to standardize and improve the bond futures market for the re-establishment provides a model, while the introduction of bond futures in our history has given us a lot of experience of enlightenment and lessons learned, the international capital market developed countries on the successful launch of the theory and practice of Treasury futures can also learn from us in order to avoid bond futures of our resume the process of re-exploration. " State Council Development Research Center of Gao Wei In" <resume Treasury bond futures hedge interest rate risk>> of that: "China's bond market has a certain spot size, interest rate market made significant progress, development and growth of institutional investors to become the market mainstream, Treasury futures trading in the near future need of recovery, and with some urgency. " (b that the introduction of bond futures, slow to speak of the" progressive "faction in the Ministry of Finance Lou Jiwei, vice minister of China Industry Development Report 2007, released at the point of view, said:" form a complete bond yields curve there are some basic issues, such as a sufficient number of more stable species, adequate trading liquidity and central bank monetary policy operations it as a tool for manipulation, but some conditions are not yet available. " CBRC Vice Chairman Mr. Tang had also wrote: "no reliable yield curve, it will be difficult for various types of bonds, securities and other traditional products, pricing products, and the corresponding measure of market risk, but can not class based on these products and foreign exchange forward, futures, swaps, options and other derivatives to rational pricing, market risk is difficult to make reasonable the corresponding measure. " Third, China's current situation analysis.

In recent years, has shown a downward trend in interest rates, have changed recently, the decline in interest rates during many years, the market is close to the bottom of the parties to estimate the level of bond investors face higher interest rates and the enormous risks of .2003 in the second half, bond market dropped several prominent stage. The central government bonds issued by the registration company index measure of national debt, April 29, 2004, the total index was 99.975 in government bonds, reaching the lowest point in recent years, with 2003 106.522 highest point in the second half compared to 6.15% significantly fell.

From the market point of view, the exchange rate market bond index fell more than .2004 inter-bank market economic structure, market-oriented rapid development every year and so on. In particular, accession to the WTO five years, economic globalization and to further strengthen the trend of internationalization , forcing the country's financial markets interact with the international financial markets, integration. These are the recovery of Treasury bond futures provide a favorable external economic environment.

Second, our national debt amortization has experienced administrative, underwriting, tender issued by the administrative means from the main toward the use of economic instruments, and then explore the issue of market-oriented way.

Today's market-oriented way of issuing bonds greatly enhance the efficiency of the distribution, adapted to the economic situation and the need for fiscal policy. In the issue size, but also a higher rate. In addition, the national debt limit is more abundant species to further increase interest method also more diversified, fully demonstrates the spot of bonds issued to further improve and perfect. treasury bond futures cash generated as a vector for the rapid development of the recovery of bond futures has provided an important guarantee.

Moreover, the continuous development of commodity futures will also become one of Treasury bond futures recovered propellant. Because bond futures as financial futures and commodity futures trading has a lot in common, such as the price vector is the spot, the trading mechanism is depends on the investor's expected future spot market prices and other commodity futures markets standardize and improve systems and operations in both the re-establishment of Treasury bond futures provide a frame of reference. [free paper download]

Third, the Treasury bond futures is one of the main varieties of interest rate futures, interest rate market and liquidity is an important condition for generating Treasury bond futures. As China's market economy gradually improved, China's interest rate controls have become increasingly Song, interest rate market will become an inevitable trend. For instance, China has liberalized interbank interest rates, commercial bank lending scale control has been canceled, bond repo market transactions have been expanding the market for buying a higher degree of interest rate form. This shows that to adapt to new forms of economic development needs to start moving in the direction of interest rate market big step forward. Thus, interest rate and Treasury bond futures market is the introduction of the interaction and mutual influence, interest rate market recovery for the Treasury futures provide the necessary conditions for the recovery of debt and interest rate futures market provides the necessary protection mechanisms.

Fourth, after the failure of the pilot bond futures, all aspects of relevant scholars summed up the domestic reasons: (1 bond spot market is too small, and the futures market can not meet: (2 non-market interest rates, people to set up The bond futures market distorted, difficult to form a real bond futures market, (3 preserve the introduction of subsidies and continued climbing rate of the bond futures market, (4 information disclosure is not standardized, there on May 11 inside, on Government Bond Index fell to 91.581, a record low, with the August 1, 2003 compared to the highest point of 101.857, declines to 10.01%. In the past year bond was down process, as a major investor in the commercial bond Bank hardest hit.

The bonds held by commercial banks in China accounted for about 60% of the entire bond market is about. By this calculation, the market value of 245.159 billion yuan loss of 60% among commercial banks bear about 147 billion yuan. long term, holding the hands of commercial banks Some assets of a large number of low-rate bond and risky. Now more and more difficult to issue bonds. China's financial market is currently no effective tool to hedge interest rate risk. In this background conditions, the recovery of bond futures trading has important practical significance. recovery bonds to expand the treasury bonds futures, improve market liquidity, but also can promote the process of marketization of interest rates, and provide a tool to hedge interest rate risk, and promote market discipline and efficient operation and the formation of a unified bond market .

And bond futures to China in 1992, when the pilot today than in government bonds market has been completely transformed, both released in the market size, transaction size, or in the distribution, pricing and reimbursement and other operating mechanisms are a fundamental change. Since 1979, China resumed the issue of treasury bonds since the issue size of 1993 has not been more than 100 billion, while the scale of an issue in 2001 it reached 485.3 billion, not the circulation of bonds in the bond issue is also the share of total showing a clear downward trend, market expansion in the issuance of treasury bonds, China's bond market has also made considerable progress, in order to re-launch of China's bond futures market provides a solid foundation.

At the same time the background of China's macroeconomic performance has undergone tremendous changes in China's accession to WTO, financial liberalization is an important part of economic liberalization, and development of government bond futures and other financial derivatives is a necessary requirement of China's financial opening-up.

Fourth, the need for restoration of our national debt and the feasibility of futures trading.

The need for restoration of our national debt not only by the bond futures market futures the role of the decision itself, but from the above analysis of the situation can be seen, recovery bond futures is absolutely imperative, but a point of contention is the running time : What is the current or postponed? then this must be restored from the present to determine the feasibility of bond futures. I think that this is feasible.

First, as China's socialist market economic system, further improvement of the further deepening of economic reform, China's macroeconomic situation can be described as excellent, in total economic output, screen trading: policies from different departments, management of confusion. of the current recovery Treasury bond futures above should be avoided from happening again, targeted at the market interest rate, market regulation, information symmetry and other aspects of reform to ensure the smooth resumption of bond futures.

However, you can see that although to some extent, our country has the possibility of the resumption of bond futures, but also the conditions necessary to further strengthen all aspects of construction, to prepare for the resumption of bond futures. In regard to further speed up the legal protection Futures market legislation, and gradually formed the main legal norms and administrative intervention in governance structure, supplemented by the futures market, futures market took the road of the rule of law in the operation of the market, we should accelerate enterprise restructuring and banking reform, stability, promote interest rate improve the bond futures market operation mechanism. [free paper download]


Gong Yang tree. Bonds. Chinese Financial and Economic Publishing House, 2000.

Zhao Xijun. Should be re-bond futures. Website:. Http:/ / www,

Xu Shoufu. China to explore the feasibility of restoration bond futures. Harbin Finance College, 2003 (3.

high-wei. Resumed bond futures hedge interest rate risk. Finance Teaching and Research, General No. 98.

Lou. Now difficult to push Treasury bond futures is gambling control risk. Securities Times, 2006-11-6.

Tang Shuangning. Re-launch the three conditions required bond futures. Website: http:/ /

high-wei. Resumed bond futures hedge interest rate risk. Finance Teaching and Research, General No. 98.

Zhao Xijun. Should be re-bond futures.

Website: http:/ / Bin built. Treasury bond market development urgent need to resume futures trading. Theory of 2002 (5.


[1] Gong Yang tree. Bonds. Chinese Financial and Economic Publishing House .2000.

[2] Zhao Xijun. Should be re-bond futures. Website: http:/ / www,

[3] Gao Wei. Resumption of bond futures hedge interest rate risk. Finance Teaching and Research, General No. 98.

[4] Chao. Resumption of bond futures is imperative. China Financial Computer, 2005 (2.

[5] Xu Shoufu. China to explore the feasibility of restoration bond futures. Harbin Finance College, 2003 (3.

[6] Gao Yong Qiang Ma Lianjie. Restore the conditions of bond futures trading analysis and recommendations. China's current economy, 2000 (6.

[7] Bin built. Treasury bond market development in urgent need to resume futures trading. Theory of 2002 (5.

[8] Tang Fangjie. Futures market. In 1995 Hubei Education Press.

National Debt Research Papers