Abstract
Since the global COVID-19 has broken out, the international crude oil market has been turbulent and crude oil prices have hit new lows. In April 2020, the Bank of China (BOC) "Crude Oil Treasure" May 2020 contract product caused 9 billion losses. The paper dis-cusses the case of BOC s Crude Oil Treasure and it is divided into the following three parts. First, we sort out the background and process of the BOC s "Crude Oil Treasure" and expound the operation principles of the product. Furthermore, we analyze in detail the reasons why the failure occurred. At first, we summarize the external factors under the background of the COVID-19. Then, we discuss the internal reasons for the occurrence of cross-position events. From two perspectives of product design and risk control, we try to analyze the inadequacies of Bank of China in this case. Finally, we combine the above-mentioned reason analysis and give suggestions on how to prevent such incidents from happening again from both the perspectives of both banks and investors.
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