An Empirical Study Of Financial Products' Design Of Domestic Commercial Banks In Iflation Environment

With rapid development and transformation of economic and finance and growth of household wealth in China, domestic commercial banks perceive tha the Personal Financial Services will be the new profit growth point which will become the battleground of the commercial banks. The gradually increased, Financial products have been favorable for the market since 2004 because of the increasing concept of financial management of domestic investors.The volume and size of the product showed rapid growth doubling every year, of which the number of product increases from114 in 2004 to 11,776 in 2010,and the size breaks the million lines mark.The introduction of financial products enrich our residents' investment channels, and has also become an important source of profit for domestic commercial banks.In recent years, the financial products market has indeed maintained a trend of rapid development, with gradually improving product range, widening area of investment products and more reasonable product design structure. However it is undeniable that China's commercial banks financial products market is still in its infancy, many problems exist from design to marketing and other aspects.In the financial crisis of 2008, many products linked with overseas markets carried with zero income and negative returns.It is worse that some products losses of up to 50%.In the current round of international gold prices skyrocketing, the income of many products linked to the gold even lower than the deposits in same period.These phenomenons expose the serious problems of the product design, risk management, infrastructure and other assets of financial products in banks.In addition, the financial products in commercial banks have homogeneity and lack of specific products for different customers.In particular, the structured products lack of inovation and demostic banks purchase the products directly from foreign banks,which issues a serious shortage of product design innovation.The inflation since second half of 2010 in China pose a serious challenge to the financial product market. Due to the relatively narrow channels of domestic investment, most resident investors, especially small and medium investors pin their hopes on the financial products in banks. But in the current round of inflation environment, the benefits of most financial products were less than CPI.So,the products did not play a role to protect the assets from CPI.At present, most demostic studies focused on the description of the development of financial products market, product marketing, product regulation and other macro-level issues.But there are little studies involved in the specific design of the product.This article will reseach the perspective of product design and other micro-study of financial products,and design two products of the renminbi and the dollar based on the current economic environment and domestic investors' risk preferences,which hopes to make some contribution in the design of financial products.Specifically, the paper is as follows:The first chapter is introduction, including background research, research significance, literature review, content and methods of research papers, theses and lack of innovation.ChapterⅡis the situation of financial products market in China. First,we give an analysis of reasons for rapid development of financial products market in China, and cit as an example of existing products in the market.Then,we divided the markte into four periods combining the characteristics of the market in different periods.Finally, we analysis the situation of the development of financial products in 2010 from the issue market and maturity market.ChapterⅢis the market environment of financial products of commercial banks.First.here ia an analysis of China's current status and causes of inflation, and a comprehensive evaluation through comparing the actual yield of products and current maturity inflation rate in 2010 and 2011.Secondly,we divide the customers according to income, risk preferences and other factors,and describe demand for investment products in the current financial environment,ChapterⅣis the design of financial products in the current inflation environment, whicn is the core part of this article. We design two products of renminbi and dollar on the basis of the current domestic and international economic environment. In order to protect the smsll investors' interests, we design the RMB product combing with the truth that deposits can not resist the erosion of inflation in current environment.The product will invest in inter-bank bonds, lending, repurchase, paper market, and can be reasonable to pledge the principal of investors.The second one is linked to the U.S. dollar index and U.S. dollar index futures.Subjected to the impact of the global economic situation in recent years, especially the financial crisis in 2008, the U.S. dollar index went down since loose monetary policy in the United State.However, comparing the U.S to the euro area, Japan and other economy entities related to the the U.S. dollar index,we find that the dollar index is at the bottom now and is expected to rise in the future.So the product is bullish the dollar index and make the investors enjoy the benefits and mitigate risks through the U.S. index futures.The products are mainly designed for experienced, risk-bearing ability costomors.ChapterⅤis the summary and outlook.It is the end of this thesis and the prospect of future development of China's commercial banks.