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Mechanism Design For Personal Financial Product Innovation

Posted on:2009-02-21Degree:MasterType:Thesis
Country:ChinaCandidate:P YueFull Text:PDF
GTID:2189360245987424Subject:Management Science and Engineering
Abstract/Summary:PDF Full Text Request
Commercial banks of our nation develop wealth management and innovation of other financial products. There are not many difficulties from the technical view. The key factor which constrains the innovation of financial products of our nation's commercial banks is the loss of perfect management mechanism. Consequently, this thesis is mainly about the mechanism design which will stimulate the development of wealth management and innovation of financial products.The goal of the dissertation is promotes the development of personal financial product, through mechanism design for personal financial product innovation. And the benefits of participants of economic activities should compatible with the fixed goal of the designer. Design innovation mechanism with the core theories of mechanism design and management mechanism design theory. To be more specific, incentive mechanism model, signaling model and reputation model.The management mechanism for personal financial product innovation includes,Firstly, personal financial product innovation based corporate governance mechanism. To begin with, our nation's commercial banks should make a progress in their corporate governance mechanism. From the prospect of governance institutions, our country's governance institutions should set up the competitive mechanism, which can stimulate the commercial banks construct the personal financial product innovation orientated governance configuration. At the same time, they should set up manager's market of commercial banks. So the managers will find the position that fits them. To stimulate the senior managers develop wealth management, the target of development of wealth management and innovation of financial products should write in the stimulate contract.Secondly, effective incentive mechanism for promote innovation of wealth management and other financial products. Our country's commercial banks construct the incentive framework includes material and non-material factors. And the financial planners who represent the workers of wealth management will be fully stimulated. Then, something about the strength of incentives, give more strength to the ones who have a higher ability and who spend more resources searching information. Give less strength to the ones who can not resist risks and whose cost grows rapidly if they work harder. And, the question that what kind of variables should write in the contracts, if we find a new variable which contains more information than the former variable, write it into contracts will decease agent cost. So this will reduce the backward effect of asymmetry of information to incentive mechanism. Finally, design an incentive solution which based on both personal and team level's output. And, this will stimulate the team co-operative.Next, information exposure and wealth management product information based signaling mechanism. Uncover the importance and function of building up information exposure system of commercial banks. Firstly, our commercial banks should strengthen exposure of information. Then, drew conclusions that with the supposition that the revenue supplied by commercial banks won't change their abilities of their management. The revenue released by commercial banks transmits information. The investors can discern different commercial banks with different abilities, according to the revenue information from commercial banks. The information includes historical information and information exposed recently.Set up reputation mechanism and effective constraint mechanism for commercial banks and financial planners. The Reputation of commercial banks'wealth management product is very important to the development of wealth management and innovation of financial products. By introducing a natural variable, set up reputation mechanism, highlight the random variable in evaluating the performance of financial planners. And analyze the function of reputation mechanism in improving the financial planner's market. The constraint mechanism to commercial bank's financial planners is as follows, to begin with, increase their currency revenue properly. This will increase the cost of their dropping this job. Then set up financial planner's market, introduce reputation mechanism and increase their reputation revenue. Finally, speculate the natural variable, this will help strengthen the supervision to financial planners indirectly. Finally, found the management mechanism which will promote the development of wealth management and financial product innovation.
Keywords/Search Tags:Mechanism Design, Personal Wealth Management, Incentive Mechanism, Signaling, Reputation Model
PDF Full Text Request
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