The Form And Precaution Of The Financial Product's Risk

The time from American sub-prime mortgage crisis triggered to a global financial crisis has last about two years. Until now the influence stills go on, a series of chain reaction will still affect the whole financial and economic fields. The words "financial crisis" was always mentioned by the people. It means how large the influence of this unusual financial crisis.It isn't different to find the main reasons of this financial crisis, which include follows: relax loan criterion and original loan product; popularizing securitization and higher credit rate; the trigger effect of the standard rate's rise and the house price's down; lack of transparency and market supervise. Among those reasons, the securitization and the financial derivative product was the focus in this crisis. For the using of this original financial instrument, the risk in financial field has been accumulated and spread to other economic fields when the risk released, with many institutions involved into this crisis and suffered heavy losses.Financial innovation is the key factor to keep competitive power for the financial system and it's also the huge impetus to financial development, which impetus the financial system develop from elementary into higher extent. So the financial innovation has great meaning to the financial market's healthy running and development. While the linkage and osmosis of the original financial instrument will make the financial institution face more systemic risk. So how to use this "double-edged sword" is the main topic for us to discuss. It means we need to discuss how the risk of original financial instrument coming into being and how it transmit? So we can bring forward effective countermeasure, and also strengthen risk manage and risk supervise.The article mainly focus on how the financial derivative product's risk coming into being and how it transmit. Also I bring forward effective countermeasure to strengthen risk manage and risk supervise. The structure of article is divided into five parts, as follows:The first part is the introduction, which mainly includes the raised issues, the main summarized theory of literature and articles, the main analysis methods and structure.The second part mainly introduces the reason and current situation of the financial innovation, which has great influence to global financial market. The current situation and influence of the securitization and the financial derivative market is the stress of this part.The third part sort the risk of the financial derivative product and also mainly analysis how the financial derivative product's risk coming into being and how it transmit.The fourth part mainly analyzes the American crisis under the angle of financial innovation, so it concludes two aspects. The first aspect analyzes the course and reason of the financial crisis. The second aspect contrasts the three representative crisis events.The last part is about the warning of the American financial crisis on financial innovation, which includes two aspects. First is about risk prevention problem, which includes interior control and exterior control of the risk. The second aspect is the lesson on china's development in financial innovation especially in securitization and the financial derivative product.