What Is Commodity Finance?

Financial instruments are also known as "credit instruments" or "trading instruments". Lack of funds borrows funds from surplus funds departments, or when issuers raise funds from investors, written documents in a certain format that determine the obligations of debtors and creditors The right is a contract with legal effect. Financial instruments are the objects of financial market transactions. They are created and developed with the development of credit relationships. In today's complicated and complicated financial and financial relations, it is impossible to rely on verbal agreements to handle affairs. Spoken words are easy to cause disputes, nor can claims or ownership be transferred and circulated in the market. In order to meet the needs of various forms of credit, financial instruments such as commercial paper, bank deposit certificates, stocks, and bonds were produced. Any financial instrument has a dual nature: to the issuer (borrower) of the instrument, it is a debt; to the investor (lender), it is a financial asset. Each financial instrument has its own special content to meet the different needs of the transaction, but some contents are common, such as: face value, issuer (drawer) signature, term, interest rate (single or compound interest) Wait. ^[1]

Basic Information

Chinese name

Financial tool

Foreign name

financial instruments

Overview

Financial instruments refer to financial markets

basic introduction

Means in

Financial instruments are financial instruments

Financial instruments are classified according to their liquidity and can be divided into two categories:

Fiat currency symbol

This means modern

Generally believed that financial instruments have the following characteristics:

Repayment period

The repayment period refers to the time elapsed after the borrower gets the loan and the loan is fully repaid. Various financial instruments generally have different repayment periods when they are issued. In the long run, there are 10, 20, and 50 years. There is also a permanent debt, this

according to"

Financial instrument innovation can enhance the types of financial commodities in the financial market and improve the types of Chinese financial markets

Since the reform and opening up, the innovation speed of China's financial instruments has gradually accelerated, and new financial instruments have continued to emerge. This has greatly enriched the types of financial commodities in China's financial market. At the same time, due to The emergence of financial instruments has driven the emergence and development of related financial markets. At present, a financial market system consisting of currency markets such as the inter-bank lending market, commercial paper market, and large deposit certificate market, as well as capital markets such as the government bond market, corporate bond market, and stock market has been established. However, it should also be noted that because China's financial instrument innovation is restricted by various conditions, especially the derivative financial instrument innovation is not enough, so the financial market system is not yet perfect. Therefore, intensifying the innovation of financial instruments will definitely further promote the development of financial markets and improve the types of China's financial markets. ^[5]

The innovation of financial instruments can increase the risk-avoidance of financial market entities, the opportunities and means of investing in profits, and the scale of China's financial market

Different financial instruments, because of their different repayment periods, liquidity, security, and yield, can meet the different financial needs of market participants. Through the innovation of financial instruments, financial market entities can have more choices to form their own asset portfolios, which greatly enhances their opportunities and means to avoid risks and invest in profits, thereby attracting more investors to join the financial market. In the future, the scale of financial markets will be continuously expanded.

Financial instrument innovation can create conditions for China's financial market to be in line with international standards

In the past two decades, China's financial market has achieved great development, and the number of financial instruments has continued to increase. However, compared with developed countries and even some emerging market countries and regions, there is still a large gap. At present, the types of financial instruments in China are still relatively small, and the size and types of financial markets are small. Freely convertible. Therefore, intensifying the innovation of financial instruments and gradually diversifying the types of financial commodities will expand the size of China's financial market and improve the types of financial markets, thereby promoting the opening up of China's financial industry and integrating China's domestic financial markets into international financial markets As an important part of the international financial market, it is of great significance to realize the internationalization of China's financial market.