- 期刊
Why Bank of China Became the Only Bank in China that Suffered from Negative Pricing of the WTI Crude Oil May 2020 Futures Contract
摘要
Many major banks in China introduced their own crude oil futures product to attract investors. However, the price of the WTI crude oil May 2020 futures contract plunged negative for the first time in the history. Bank of China (BOC)'s product called Crude Oil Treasure brought itself a huge loss. However, other major banks in China did not make any losses after the price of WTI crude oil hit negative. By investigating the BOC's crude oil futures product and BOC's reaction to the negative pricing of WTI crude oil futures, this article shows that it is not the negative pricing itself that should account for this catastrophe, but BOC's wrong choice of settlement date, lack of risk disclosure to investors, unsophisticated conduct faced with negative price warning and failure to forced closeout or rollover for its investors. In contrast, other major Chinese banks performed professionally in terms of the choice of target customers, the set of settlement date, margin closeout and risk disclosure to investors. Therefore, they prevented themselves from being impacted by the negative WTI crude oil futures price.