Analysis from The Bank of China on The Crude Oil Treasure Incident

Abstract

On April 20, U.S. time, the price of the West Texas Intermediate (WTI) crude oil May 2020 futures contract fell to a negative approximately $38, which caused the Bank of China (BOC) and the buyers of the Crude Oil Treasure a considerable loss. To avoid the incident in the future, this paper will focus on the mistakes of BOC and give our suggestions to Chinese banks. This paper uses specific data from BOC's announcements, Wind, and BEA database, and compares with other Chinese banks that avoided this disaster. We hope to impact the future development of Chinese banks and other institutions. We suggest new regulation and operations systems.