| As personal financial products, structured products were produced in the United States at first. With the pursuit of profit of domestic banks and investors’demand for high-yield financial products, structured financial rise in the domestic financial market and develop rapidly. Structured financial products are combinated by fixed income and derivatives, investment has provided a guarantee for the capital invested in the fixed part of the funds in securities; the other hand, part of the highly leveraged derivatives may earn high income. In2007, securities bull market for structured financial products shine. Thus, either investors or banks view structured financial products and rational products as products of high-yield and low risk and have high expectations about them. In this case, a weak awareness of risk management of banks, investors neglect the risks of the products.However, the2008financial crisis, many structured financial products income is zero or even negative, a sharp decline in the issuance of structured financial products, up to date, has not yet fully deserted of the market. In this "crisis", banks and investors are aware of the high risk of structured financial products and start to focus on product risk management.This paper introduced market risk management on structured financial products through an overview of the concept of structured financial products, features, and market risk management,. Including market risk identification, measurement and control, and strengthening of market risk management policy recommendations. The article focuses on market risk measurement section which i s the weakness of risk management, this paper makes study on exchange rate linked financial products produced by Bank of China through a comprehensive introduction to risk measurement tools and advanced risk measurement tool VAR, it can offer an reference for banks to manage market risk management of structured financial products as well as investors. |
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