Research On Pricing And Risk Management Of Zheshang Bank’s “Ju Xin Ying” Structured Financial Products

As a new investment type,structured financial products have the characteristics of diversified linked targets and flexible returns,which are favored by many investors.However,due to complex design and diverse income structure,there is great risk behind rapid development.Therefore,it is particularly important to study the pricing and risk management of structured financial products.This article takes Ju Xin Ying 360 day structured financial products issued by Zheshang Bank in 2021 as the research object.Starting from the current situation of Zheshang Bank products’ pricing and risk management,firstly,the Monte Carlo simulation method based on GARCH model is used to calculate the product pricing.Secondly,the Va R method is used to quantify the market risk faced by the products.The risk faced by investors is classified and discussed.Then,the sensitivity analysis of term structure,risk-free interest rate and other factors is carried out to provide basis for risk management.Finally,it puts forward suggestions from the perspective of regulators,commercial banks and investors in order to safeguarde the interests of investors and promote the stable healthy development of the financial market.After the research,the following conclusions are drawn:(1)The theoretical pricing of Ju Xin Ying is higher than the actual value,and the product is issued at a discount to protect the investors’ interests,which is helpful to control risk.(2)Its operation mainly involves market risk,with low probability of loss and medium-low risk.(3)With the extension of duration and the reduction of risk-free interest rate,the product pricing can be higher.In this regard,appropriately adjust the duration and interest rate to ensure that the pricing is maintained at a normal level.It is helpful to avoid the phenomenon that the circulation of funds is blocked and the issuance cost can’t be recovered.When the stock market is in a turbulent period,the return to maturity can not be guaranteed.Therefore,investors ought to choose carefully.(4)The product is under closed management and lack of early realization channels of funds.Suitable redemption methods needs to be set.The secondary market should be formed to improve liquidity.There are also various kinds of linked targets to provide diversified investment options.In addition,the subscription starting point of the product can be adjusted to attract a wider range of investors.Based on the above considerations,regulators need to raise the threshold of market access and strengthen publicity education.Of course,commercial banks should develop financial products with reasonable pricing,enhance risk management ability,optimize product design and use financial technology to promote development.Furthermore,investors ought to establish the rational investment concept and objectively recognize financial products.