On The Information Disclosure System Of Banking Non Breakeven Finance Product

Since the early 1990s, China’s commercial banks began to develop personal financial business, and finance products got continuous innovation with structural and derivative characteristics. Buying banking personal finance products has been the key investment of common consumers. On the one hand, with the development of the living standard, modern people expect higher returns of finance product. On the other hand, commercial banks develop non breakeven finance product for reaping higher yields. So there are far more non breakeven financial products than breakeven products. What investors faced is different in different financial products, and buying financial products is high profit economic activity with high risk. In non breakeven financial products, commercial banks do not guarantee for the capital or income, and the risk transferred from commercial banks to investors. Therefore, investors should make their choice basing on the full understanding of non breakeven financial product.However, the non breakeven products usually have complex structure, and the information between commercial banks and investors are asymmetry. Investors’ information channel is very simple and they must cost more to find out the information of non breakeven financial products actively. So the investors have been increasingly in a disadvantageous position. Banks usually have misleading and induced behavior when they sell non breakeven products in practice. For example, they usually hide the category of financial product, and exaggerate the expected return and so on. Poor disclosure becomes the common trigger of the dispute between banks and investors.China’s current legal rules have not been radically reduced on the information of non breakeven financial product and have not made strict regulation about it. The legal rules mostly are department rules issued by China Banking Regulatory Commission, and the concrete contents of information disclosure are imperfect. The rules about financial product have lower legislation level, and some rules are not operative. So that commercial banks do defective behavior of the information disclosure, and it go against investors comprehensively understand the relevant information about non breakeven financial product. Therefore, banks’ active and perfect information disclosure is extremely important for the development of non breakeven product, and it is very important for protecting investors’ legal rights and developing financial market healthy.Firstly, we should improve the legislative level basing on the principle of information disclosure of China’s banking non breakeven finance product, and perfect the Commercial Bank Law. We should improve the legal regulation system of information disclosure of non breakeven finance product by setting the standard format. Secondly, pinpoint the subject, content, method, time of information disclosure and banks’ legal liability. Finally, improve the implementation of the law system from protecting investors by improving the dispute settlement and playing to the role of trade societies. We can maximum protect investors and promote the developing of financial market by improving the information disclosure system of non breakeven product.