Research On The Risk Measurement Of Financial Products Issued By Chinese Banks

In recent years, domestic household wealth and investment assetscontinued to grow, so do the number of people of high net worth wealth.The sluggish stock and property markets do not meet the strong demandfor personal banking wealth management business. At the same time theprocess of market interest rates is continuing, and financial institutionsare facing increasingly fierce competition. Commercial banks are urgedto transfer from a traditional business of deposit and loan, so issuingfinancial products is a good option. The first since the launch of financialproducts at2004, in ten years the number of financial products issuedincreased by400times.Unfortunately, as of March102014, among114187issued financialproducts, the products without the actual rate of return account for up to54.15%. A serious lack of disclosure of financial products of banksmeans that the traditional method is not applicable to financial riskmeasurement of financial products. For this case, the risk measure method for financial products is of great significance.This paper is to work out the measurement of financial products ofbanks. Starting from a product point of view, we analyze the developmentstatus and product features of financial products issued by Chinese banks,then we introduce the way to clarifying financial products and the threemain operating mechanisms of financial products to raise funds. On thisbasis of asset management and cash flow, we combined the qualitativeanalysis and quantitative analysis methods to design similar products&institution risk analytics system and funds allocation risk analytics system.Finally, taking some typical products as examples, we analyze thereliability and validity of two set of risk measurement systems by usingthem to analyze financial products of different operating mechanisms.With the ability to reveal the risks, the method in this paper agreeswith financial products lack of enough disclosure. Operability of riskanalysis systems will help to improve investor awareness of risk whenbuying financial products.