F-SYSTEM: IMPROVE INTERBANK MARKET SERVICE

Major Functions of the F-system

The F-system is designed to serve as an overall analyzer of the trading data within the interbank funding system. Without being involved in the internal management or finance system of financial institutions, the F-system will provide market members with basic bond analysis and benchmark information on the whole market.

The forthcoming F-system is composed of five modules. The market situation module offers real-time and historical market analysis as well as an inquiry function. The inquiry function will allow users to attain a clear picture of the latest transactions and quotations in the market. The bond yield module provides users with yield analysis in real-time, historical and hypothetical circumstances. The position management module presents a user with its trading records as well as its sum total in the system. The counterparty management module facilitates users' inquiries into their own internal information, counterparts' transactions and public information, and helps set a credit line by monitoring counterparts' creditworthiness and inquiring into their trading record. The term structure module is designed to figure out the interest rate term structure, for any fixed date, on the basis of all listed bonds for that day. This will help users rationally price bonds.

Significance of the F-system

Firstly, the system will provide market members with comprehensive services and so improve the service of the interbank market.

Secondly, the system integrates the financial institutions' transactions with analysis, and controls trading and credit risks before clearing.

Thirdly, market members equally can get basic trading information with the F-system; therefore, risks from information asymmetry in the interbank market will be minimized.

Last but not least, through a successful combination of international advanced financial analysis theory and domestic interbank market practices, the F-system, through its launch and perfection, will pave the way for the application of financial theories in China's financial market.

(by Chen Lifeng)