A Twin Dialectical Analysis of Financial Innovation and Financial Risk

Finance is the core of modern economy.Financial innovation is the catalyst of financial markets.It produces the formation and development of each sub-market,and continues to promote the improvement and maturity of financial markets.In the background of the current international financial crisis,taking financial derivative instruments for a chain,this dissertation analyses the logical relationship amongst financial engineering science,financial innovation and financial risk,which financial engineering science is a carrier,financial innovation is a seeming form,and financial risk is an alternative potential result.At the same time,this article discusses the dialectical relationship between financial innovation and financial risk in detail.All of them are products of the existence and development of financial market.Clarification of the inherent market link between financial innovation and financial risk,the establishment of a mature financial market suited to China′s economic development has an important guiding significance.