![Risk.net](https://www.risk.net/sites/default/files/styles/print_logo/public/2018-09/print-logo.png?itok=1TpHrpuP)
Battle formations
Major Chinese entities and international banks are steeling themselves for a protracted battle on multiple fronts related to the use of over-the-counter derivatives. The confrontation is killing business and preventing some Chinese entities from hedging their commodity, interest rate and foreign exchange risks at a time of heightened volatility. William Rhode reports
![chineseterracottaarmy chineseterracottaarmy](/sites/default/files/styles/landscape_750_463/public/import/IMG/561/88561/chineseterracottaarmy-580x358.jpg.webp?itok=e2Jh4Tj2)
There has been ongoing speculation in the market as to what prompted China Eastern Airlines, Air China and Cosco to write letters in late August to a raft of commodities dealers, including Goldman Sachs, Morgan Stanley, JP Morgan, Citi, Credit Suisse, UBS and Deutsche Bank, allegedly at the behest of China’s State-owned Assets Supervision and Administration Commission (Sasac), challenging the legality of loss-making oil-related structured options.
The letters were largely similar in nature and
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Commodity markets
Sustainable bond markets miss an options trick
A derivatives mindset could boost lagging sustainability-linked market, argues climate think-tank
Green knights? Banks step into struggling carbon credit markets
Clearer global standards and a new exchange may attract dealer entry, but supply and demand challenges remain
Bachelier – a strange new world for oil options
Model tuned to negative prices has implications for pricing, margining and delta hedging
Asian LNG derivatives trade surges on increased hedging
Expectations grow that a long-awaited Asian gas derivatives market is emerging
US courts restrict reach of Commodity Exchange Act
Recent cases make it harder to pursue instances of overseas misconduct
Esma releases first crop of position limits
Regulator moving away from publishing all limits in November
Carbon life force: derivatives defy coal's bleak future
Coal producers shorting volatility to collect premium, say traders
Plastics hedging rising amid US chemical industry boom
Several obstacles limiting potential growth, say plastics market participants