The Innovation Of The Personal Financial Products On Foreign Currency In Commercial Banks

This paper based on the ground of the business innovation in commercial banks, focusing on the innovation of the personal financial products on foreign currency in Chinese commercial banks. The paper studied the domestic and international theories, established in domestic practical, used the real example examining, raised a series of propose. Now, the writer would briefly explain the main research step and content of this article.First, the writer got the systemic research and settlement of the financial products' innovation theories, summarized the key principle of representative theory for every periods, found out the corresponding financial product. Then concomitant with Chinese fact, the writer gives the new definition for 'financial products' and 'the innovation of financial products', as 'The general names of all financial instruments and services related to the personal customer which is offered by the commercial banks, and the surplus fund was transferred from assets right parts to another, realizing the investment efficiency of capital market', 'The change of the financial instruments to customers which in offered by the commercial banks'.Second, the paper researched the different reasons in China from other countries in the innovation of financial products. The research is based on the macro background, including the optimal scale of the Foreign exchange reserve, the rationalization trends of finance adjusting and controlling, the development of the offshore market. Followed above research, the internal reasons of the innovation in China involved that the capital market fully open, including the keen competition and Participating in the international derivative market which the commercial bank should face in WTO; management expectancy of personal domestic and foreign currency assets; the demand of individual participating the foreign currency market, foreign currency storage extended including the requirement of the value preserving with the personal exchange revenue increased and the different risk partiality, the motivation of chasingmargin of commercial banks, companies and individual, including the purpose of absorbing the capital source for lending in commercial banks , the commercial banks fostered the new point of profit growth, enterprises was inclined to change financing currency and the subject position in innovation of commercial banks. The article adopted general equilibrium analysis and method of game theory, established the commercial banks special status of the financial market. Only the commercial bank carried on initiative innovation , could realize its efficiency maximized. So, the commercial bank is the important strength of promoting innovation.Third, the paper focus on the actuality in China, classify the products with different standards, concluded the population characteristic, and discovered existent defect and deficiency. Such as shortage of product variety and quantity , centralization in products' term design and so on. The paper used Black & Scholes Model and Binomial Tree Model to analyse the pricing defect. Among the process, the writer utilized the method of Monte Carlo. After research the defect in pricing and risk control, the writer raised several methods to avert from low efficiency , such as the diversification of combined facilities, the Scientific determination of yields, the younger of target and so on.Finally, the paper ulteriorly raised some political advises to build a health market entironment. The products' innovation must follow safe, solidity, protect and efficiency principle. The banks should also provide the contemporary manpower and material resources.