Over-the-counter (OTC) derivative contracts held by foreign banks in Shanghai had nearly doubled by the end of June from a year earlier as China revived financial derivatives after years of hiatus.
The nominal value of the investment vehicles - including currency and interest-rate-based forwards and swaps - held by the foreign banks amounted to US$29.76 billion at the end of June, up 93.2 per cent year on year, the Shanghai office of the China Banking Regulatory Commission (CBRC) said yesterday.
The disclosure shed rare light on foreign involvement in the mainland's nascent financial derivative markets.
The banks generated US$5.44 million of revenue from the products in the first half, the statement said.
China banned financial derivatives in 1995 because of price-rigging in treasury futures contracts.
Onshore financial derivative markets were not revived until the last two years with the introduction of currency forwards, currency and interest-rate swaps traded on the OTC markets and warrants quoted on the stock exchange.