In the literature review section, we will introduce what are derivatives、Why do Banks use derivatives and their compacts.Derivatives are financial instruments whose prices are determined mainly by the prices of underlying products.Typical derivatives include forward, futures, options and swaps.Commercial Banks using derivative’s purpose includes adding earnings、reducing risks and financial Management.Derivatives also brought many benefits to Banks.They can reduce the interest rate volatility and the cost of using funds.And effectively manage relevant risks of banks. Thank you.