A Study On The Design Of Exchange Rate Linked Structured Products Of Commercial Bank In China

The structured financial products refer to a new type of bank wealth management products that combined the features of the fixed-income securities and derivatives transactions. Since 2003, the structured products in China appeared as structured financial products, and grew to one of most wealthy business for commercial banks rapidly. It created a new profit growth point, and developed a far-reaching impact on the operation and management of commercial banks. The development of structured financial products played an extremely important role in enhancing the profitability and competitiveness of commercial banks in china.According with different derivatives, structured financial products can be divided into different categories such as interest rate-linked, exchange rate-linked, equity-linked, credit-linked and commodity-linked type, etc. This paper seeks to make a systematic study on the design of exchange rate-linked structured financial products. This article carried out the basic situation of Chinese exchange rate-linked structured financial products by market research and analysis, and made sure the design principles that the structured financial products needs to comply with in the design process. Product design process needs to know the basic elements of the design, pricing methods, returns and risks when commercial banks carried out structural design of product innovatively, and the paper makes a detailed analysis about all of this. Combined with the three common different revenue forms of Chinese exchange rate-linked structured financial products, this article analyses the various forms of design structure respectively. Finally, for the obstacles that impede the development of Chinese exchange rate-linked products, the paper put forward with some feasible options to promote the development, and aimed to give some suggestion to help the design of. related products in reference.In this paper, research methods combined the theoretical and practical analysis. When introducing related basic theory about the design of the exchange rate-linked structured financial products, the paper analyzed the characteristics and problems in the light of the status quo of Chinese exchange rate-linked structured financial products, then put forward some specific development strategy, applied economic theory to the realities of China's national conditions. In the discussion process, the article also paid attention to use both normative research and empirical research. In the process of analysis, the paper used a large number of cases and data to demonstrate the issue. In accordance with the characteristics of different types of products, this paper analyzed their inherent design principles. After the objective analysis of various aspect of the exchange rate-linked structured product, it put forward the best possible design recommendations.The main contribution of this paper is: First, new ideas on the topics choose:In the relevant information the author access to, there is no literature that made special studies focused on exchange rate-linked structured product in Chinese financial market specifically. This paper carried out a detailed investigation and analysis on China's current exchange rate-linked financial products, and tried to hook on the design process of exchange rate-linked product.Second, in analyzing the design of the existing exchange rate-linked product in the market, the products were divided into three groups according to different income characteristics:the price range linked type, income accumulated type, and price-triggered type. Aimed at products with different design features and income characteristics, structure, pricing and related risk management measures were discussed. The paper also made a detailed analysis of using the various design parameters in the process of the application, and analyzed the various factors how to impact on choosing the parameters.The shortcomings of the research reflected in following aspects:due to the exchange rate-linked structured financial product is a innovative financial tool in China, they were at the developing stage, so the relevant literature are in shortage. And the disclosure of information in commercial banks are not transparent, the means of the concrete operation were protected as a bank's internal confidential. Therefore, when analyze the different types of exchange rate-linked products; the paper can only do some brief analysis of the basic elements based on relevant cases, and do not make a concrete analysis of practical operation. The article also failed to give a very precise function of the expression on the design of parameters, and these deficiencies can be further studied by the later scholar.