At this stage, most of the foreign exchange structured deposits with huge amount (more than $3 million) can be discussed and decided by financial institutions and customers on the details of annual interest rate payment, term and termination clause. However, if customers mean that they are not technically professional, financial institutions can make use of their professional advantages to make profits in the formulation of terms. At present, in most products, financial institutions have the right to terminate early. Even if some investment and wealth management products give investors the right to stop and redeem, customers will have to deduct a certain percentage of funds or fees to pay higher service fees if they need to redeem the products before they expire. This commitment is more conducive to financial institutions to play their professional advantages and make profits. In addition, because structured goods came out soon, the supervision system was relatively backward, and there was no mandatory requirement for every banking industry to publish product information, which prompted many investors to simply trust commercial banks and invest wildly in income.
But I don't know anything about the specific operation, actual effect, risk and management method of the project investment, which also causes the lack of objectivity of the investment to some extent. In order to attract more foreign exchange deposits, fierce competition has been launched among financial institutions. After the country relaxed the upper limit of transaction deposits interest rate on foreign exchange, banks gradually replaced the original foreign exchange demand deposits with structured deposits in foreign exchange transactions to attract depositors to save. In this fierce competition, many financial institutions launched price competition and successively raised the interest rate of time deposits. Some banks even take advantage of vicious price competition to get more foreign exchange deposits by allowing customers to get more income than specific long-term investments.
Due to the lack of corresponding methods and professionals, many domestic financial enterprises are not worth the loss when they participate in international investment derivatives trading. In this case, the price competition driven by the annual spread of deposits and loans not only harms the financial institutions themselves, but also leads to greater risks for investors. Because unilateral structured savings can interrupt the agreement in advance, when the market situation changes against borrowers, the structured savings agreement between banks and investors will be interrupted.