Bank Personal Financial Services Asymmetric Information Problems And Risk Control

As our country's economy develops, people's disposable income and their living standard increases. The average disposable income of rural and urban family in our country was 13786 Yuan in 2007, and the rural and urban residents'deposit balance reached the record-breaking 2179 billion Yuan in 2008.It's very natural that people want to make some investment after becoming wealthy. In 2003, Bank of China issued the first structured deposit product named HUIJUBAO, which marked the beginning of wealth management business in our country. After that, many banks followed to bring about their products such as HUIDEYING, HUILIFENG, WENDELI. As the customers'demand increases, the number and size of personal banking wealth management products rises, moreover the currency and term has also diversified. In 2007, banks issued 1302 products of RMB and 1760 products of foreign currencies. In 2008,56 banks provided 4456 products which were more than that in 2007.When personal banking wealth management products are enjoying the rapid growth, something inharmonious happened. Due to the fluctuation of financial and commodity markets since 2008, some investors got no profit or even lost some principal by investing in some products. According to the "2008 Bank Financial Product Evaluation Report" published by Chinese Academy of Social Sciences, besides the QDII products issued by mutual fund companies, a total of 34 expired products got zero or negative returns in 2008.Under this situation, investors and major media's voices of doubt on personal banking wealth management products were so aloud that they even brought about instability to the society. The reason for questioning is that people were not prepared for zero profit or even loss to the principal. This is the information asymmetry at work. Due to the reason information asymmetry, people purchased what they would not want to buy, and banks sold the products to whom they should not have sold.a Comprehensive and correct understanding of information asymmetry problem that exist in personal banking wealth management services is a prerequisite to ensure its healthy development. For this purpose, this article gives an in-depth analysis of the information asymmetry issues that exist in all aspects of personal banking wealth management services, such as design, distribution, and management, and then find out the reasons for its existence. Based on the analysis of the reasons, this paper also uses the theory of information economics and information asymmetry models, to make some constructive suggestions to the development of China's commercial banks personal wealth management products.