(1) Fundamental motivation: Pursuing profit If financial institutions have no profit-seeking motivation, then commercial banks may carry out financial innovation. For example, during the planned economy system in China, banks were set up to raise and allocate funds for economic development. All the funds are formulated and executed by administrative orders, and at best, they are government cashiers, and the funds are not allocated reasonably according to market demand. In the transition period from planned economy to market economy, because it is not an independent economic entity in the true sense, it also has the color of planned economy, and its desire for financial innovation is also insufficient. However, with the deepening of economic system reform and financial system reform, especially after the end of the five-year protection period after China's entry into WTO, the activity space of financial institutions is increasing, and the profit-oriented business model has gradually become an important goal of the development decision of banking and financial industry.
(2) Avoiding financial control No matter in which country, the financial industry is generally subject to stricter management than other industries. When the government's financial regulation hinders the financial business activities and the further development of the financial industry, resulting in the decline in profits and operational difficulties of financial institutions, financial institutions will do everything possible to bypass the regulatory restrictions of financial management authorities through financial innovation for their own survival and development, and strive to minimize the resulting constraints and losses in order to win a competitive advantage. For example, representative financial innovative products include Eurodollar (1958, international banking institution), Eurobond (1959, international banking institution), parallel loan (1959, international banking institution) and automatic transfer (19 1. These financial innovations can well explain the financial product innovation and "adversity innovation" of commercial banks associated with market expansion in this period, the financial innovation caused by the demand for financial asset innovation by rapidly growing wealth, and countries with more financial market control measures often become the focus of financial innovation.
(3) Risk transfer and the application of high technology are typical financial innovations to prevent and transfer the risks caused by the total collapse of the Bretton Woods system and the two oil crises in the 1970s. Among them, the progress of computer technology and its rapid promotion in the financial industry also constitute a part of the background of this period. The main purpose of financial innovation in this period is to transfer market risks. Representative financial product innovations include floating rate bills (1970, international banking institution), federal residential mortgage loans (1970, USA), foreign exchange futures (1972, USA) and foreign exchange forwards (1973, international). The inflation in 1970s and the fluctuation of exchange rate and interest rate made the return on investment very uncertain, which prompted commercial banks to create new financial instruments to reduce interest rate risk. Another important motivation is the application of high technology. In particular, the wide application of modern communication technology and computer technology in the financial industry has triggered a "technological revolution" that has changed history in the financial field, which has enabled comprehensive services that could not be achieved in the past to be realized, greatly reduced costs and expenses, and improved the function of financial institutions to expand regional business. This is also an important factor to promote financial innovation.
(IV) Financial Liberalization In the 1980s, due to the worldwide debt crisis, western European countries generally relaxed financial control, and the degree of financial liberalization was significantly enhanced. At present, financial innovation products mostly appear in the form of off-balance-sheet business of banks. Representative financial innovation products include currency swap (1980, USA), interest rate swap (198 1, USA), note issuance facilities (198 1, USA) and option trading (65438). Due to the restrictions on the deposit and loan interest rates of commercial banks by financial supervision departments, commercial banks are forced to find new profit growth points outside the balance sheet business, which makes the off-balance sheet business of banks get unprecedented innovation and development during this period. At the same time, countries have put forward corresponding requirements for commercial banks' reserves, which enables banks to transfer off-balance-sheet assets by means of loan sale (securitization), standby letters of credit and swap transactions, so as to alleviate the pressure of capital adequacy ratio and obtain higher returns.