Research On Design Innovatio Nand Recommendation About Equity-linked Structured Financial Products In China

With the continuous development of China’s economy and residents savingsrapidly increase, the demands for the financial product is also increasing. While on theperspective of commercial banks, they not only have to face the competition amongpeers, but also have to face the problem of loan spreads in the capital market. On theface of increasingly fierce competitive environment, commercial banks will graduallyfocus to the middle of the transition from traditional business operations, financialproducts naturally become the focus of the development of channels. In order to meetthe demand of financial products in financial markets, commercial banks developed avariety of financial products according to the different investment characteristics, whilestructured financial products have gradually been widely concerned for their diversecharacteristics of its structure.The structured financial products that commercial banks of China to carry out arelater than foreign countries, but its development is very rapid, the type and issue sizehave been increased rapidly in just a few years. Structured financial products haveflexible diversity through combing with the characteristics of fixed income securitiesand financial derivatives contracts. Compared with the traditional financial products, itcan provide a higher return under the condition of low risk, so it quickly favored byinvestors.This paper focuses on the equity-linked structured financial products, to study itsdesign structure, evaluate the product, creatively put forward the price and structuredesign method which in line with the characteristics of its investor, and build theproducts recommended methods for different types of investors. The research contentsinclude: The first chapter describes the research background, the purpose andsignificance of the study, summarizes the research status of the related literature at homeand abroad in recent years; The second chapter introduces its basic concept and theory,and from the perspective of risk and return, we classify the structured financial productsthat are in circulation in the market; The third chapter summarizes the basic frameworkfor equity-linked structured financial product design, then select representative productsand make some empirical analysis, results proved that the equity-linked structuredfinancial products of China are almost low risk types, according to the above analysisresult, this paper analyzes the design problems of equity-linked structured financialproducts in China; The fourth chapter starts from the investors’income，savings and theexpected return and risk of the corresponding financial products, puts forward a newproduct design model according to different investor characteristics, deduces theproduct design model combing with the characteristics of the risk preferences of investors and gives the product structure suitable for the preference through thesimulation of investor preference; The fifth chapter starts from the risk preference, todeduce the utility function of investors with gambling equivalent method, construct anew recommend method which can quantitative analysis for product through furtherstandardize and carry out empirical analysis by the proposed design and recommendmethods.