Interest Rate Risk Management of Commercial Bank based on Financial Derivatives

Interest rate is the most important variable in the financial markets, the interest rate changes has a very important impact to the financial market and even the entire economy life. With China's interest rates liberalization, the interest rate risk will become one of the main risks our country commercial bank faces, and interest rate risk management and prevention must become the main content of bank risk management. In this paper the formation mechanism of the interest rate risk of commercial bank is analyzed, and then this paper puts forward the model of financial derivatives to prevent the interest rate risk of commercial bank, and also discusses the improvement methods of interest rate risk management.