The Risk Control Of Foreign Exchange Structured Deposit In China

As for the commercial banks in China, the increase in personal financial management is an assured trend in the future. On one hand, as the economy develops and personal income increases, people have distinct requirement for their own assets, which makes personalized financial necessary. For their plans for assets, people are not longer satisfied with the traditional deposit/withdraw businesses the banks have. Therefore, the FESD, which have various types with high potential income and can be designed to fit specific customer needs, has a great future prospect in China's finance market. In 2010, the appreciation of RMB and the predicted continuation of this trend urge people to rush to banks and exchange their foreign currencies into RMB, in order to prevent further depreciation of their assets. How to effectively control the risks of the FESDs becomes a problem that we must face and pay special attention to.The FESDs is a type of product introduced by banks that combines the basic business of foreign exchange deposits and various financial derivatives. The FESDs can be categorized as principal safe or non principal safe. The risk of FESDs is assessed by the sensitivity of the face value of FESDs with respect to related factors. In China, the FESDs have experienced three main stages: initiation, expansion and acceleration. However, during their development, due to similarities between products, unreasonable pricing, limited control by the banks, limited knowledge of the investigators and other reasons, the risks of FESDs accumulate. Therefore, in order to control the risks of FESDs, it is necessary to improve the FESDs market environment, to improve innovation of FESDs and to improve the risk-resistance ability of individual investigators.