In the past few decades, especially in the last two decades, the technological environment related to financing has changed greatly around the world. It can be said that without the rapid progress of modern high technology, especially information technology, there would be no financial reform. In today's financial industry, any normal financial transactions and business activities are inseparable from the mastery and analysis of domestic and foreign financial market information, computer network systems and related advanced computer application systems, especially some analysis and forecasting systems. In these analyses, in order to neutralize the risks caused by fluctuations in market interest rates or remittances, financial institutions must effectively price and hedge various financial products, in other words, they must be able to arrange and design financial assets scientifically and reasonably in advance, which gave birth to financial engineering.
To be exact, he said, financial engineering is a new engineering discipline, which did not appear until the 1980s. It introduces modern engineering methods and high technology into the financial field, and comprehensively uses various engineering and information methods (including mathematical modeling, numerical calculation, network topology, simulation, data warehouse and other modern information technologies) to design, develop and implement financial products, thus avoiding risks and creatively solving various financial problems in complex environments. Therefore, on the one hand, financial engineering needs to rely on numerical calculation, chart and simulation technology, on the other hand, it can not be separated from the practice of financial market. But all this is inseparable from the support of modern information technology, especially the support of computer technology, communication technology and its application system. Therefore, experts have long pointed out that the background of financial engineering is the alliance between financial industry and information industry.
Today, the financial industry, like traditional industries, is faced with the task of product innovation. Therefore, it must face a series of problems such as product design, development, production technology, standards and technology, marketing and trading market. It is to support the further development of the financial industry that financial engineering has become an engineering discipline that can support the healthy development of the financial industry.
Financial market information and its forecast are the basis of financial integration project.
Financial market is a place where financial instruments or various financial products are traded. In the financial market, information has great value. It is necessary to guide investors and fund-raisers to participate in financial activities correctly and reasonably, ensure the stability of financial market order and avoid risks.
The practice of financial market fully shows that an effective financial market depends on the continuity, comprehensiveness and openness of information. It is very necessary to collect complex financial market information with the help of modern information technology. The network can be analyzed and spread. With the expansion of China's opening to the outside world and the deepening of economic globalization, the instability of various economic activities, especially financial activities, is increasing day by day, which is particularly important for strengthening economic and financial forecasting, enhancing preventive ability and avoiding risks.
The prediction of financial information depends on the collection of information and the construction of related information systems. As the saying goes, "a clever woman can't cook without rice." Any prediction and analysis work is inseparable from possession. Timely and accurate information. In the collection of financial information, we should pay special attention to its timeliness, predictability and comprehensiveness. Storage of financial information. Processing and utilization can not be separated from the construction of financial information system, especially the related database application system. The database in the financial field should mainly include: the macroeconomic environment database. Financial institution business information database, customer credit database, etc. The construction of these databases depends on the long-term accumulation and the development of information construction in the financial industry, and also reflects three important information resources. Its specific content has the following characteristics:
The first kind of financial information belongs to macroeconomic and industrial information, because any financial market activity can not be separated from the trend of macroeconomic changes and the trend of industrial or industrial economic activities. Therefore, in addition to industrial institutions, this part must also include macroeconomic statistical information, economic monitoring and business cycle information, as well as various macroeconomic policy information that affects economic activities. Production and consumption (supply and demand), industrial layout and other fields of information.
The second kind of financial information belongs to all kinds of financial market information, including direct financing market information and indirect financing market information. From the specific content of information, it can also include information in the fields of currency bill market, capital market, foreign exchange market, precious metal market, financial futures market and international financial market.
The third kind of financial information belongs to enterprise financial information, especially the financial reports and financial statements of various enterprises including listed companies.
These are valuable information resources, and their development and accumulation require long-term and arduous efforts. To develop these information resources well, we must rely on the standards and norms of information classification and index system. Procedural and standardized financial business and related supervision work. The stable operation of financial information system and the improvement of information awareness and quality of financial business personnel. We believe that with the deepening of financial reform and the development of financial information resources in China. Deep processing and utilization will increasingly become a significant task with far-reaching significance.
The core of financial engineering is to guard against financial risks.
As we all know, the so-called engineering refers to the use of special tools or means to carry out fine running-in and timely adjustment of all or part of the components in a complex system, so as to improve its functional operation day by day. The tools and means used include financial information resources and accurate forecasting methods. The definition of financial engineering is to rebuild the stock of financial assets through the use of financial instruments, so as to achieve a satisfactory combination, in order to maximize profits and avoid risks.
In order to prevent financial risks, the use of financial instruments is essential. Commonly used financial instruments include forwards, futures, options and swaps. According to the classification, financial instruments can be divided into spot financial instruments and derivative financial instruments. In spot financial instruments, there are four kinds of market information: foreign exchange market, money market, emotional market and stock market. In derivative financial instruments, such as forward ratio (including forward exchange rate, forward interest rate and its agreement and comprehensive forward foreign exchange agreement) is directly involved. Financial futures (including short-term interest rate futures, bond futures and stock index futures, etc. ), swaps and financial options.
Risk is usually associated with information prediction, especially with unpredictable results and unexpected events. Can be defined as risk refers to any change in the expected results. In the face of risks, financial engineering can have two choices: one is to replace risks with certainty, and the other is to only replace unfavorable risks and retain favorable risks, which is commonly known as the principle of "seeking advantages and avoiding disadvantages". But no matter which one, it is inseparable from information and its prediction.
It should be emphasized that in common financial engineering applications, such as hedging, speculation, arbitrage, structural combination, etc., there are three "inseparable" in all these applications: financial information base. It is inseparable from the calculation model, risk and decision analysis. The tools and techniques of risk management are the core of financial engineering, and financial information is the foundation of financial engineering. Therefore, modern financial engineering must use modern financial theory and rely on the development of information technology and information resources to establish various flexible and effective control models to achieve the best control of risks.
The Asian financial crisis has made us more aware of the importance of financial operation. This year, we are faced with the heavy responsibility and pressure of deepening reform, which also makes us have to deepen our understanding and understanding of further preventing financial risks in the financial system reform. Therefore, all walks of life, especially the financial and information circles, should make joint efforts to speed up the development of financial information resources, make better use of the principles of financial engineering, study the financial operation practice in line with China's national conditions, and make unremitting efforts to avoid financial risks and win benefits to the maximum extent.
References:
Economic and Information No.6, 1999