Losing ¥9 Billion! —— The Tragedy of Personal Account Crude Oil Product of the Bank of China

Abstract

The price of WTI crude oil futures contract in May dropped to a negative value on April 20, 2020 EST, with the settlement price of -37.63 USD / barrel on that day. The "negative oil price" makes the bank of China's crude oil product customers lose money, leading to risk events. This paper comprehensively combs the context of the crude oil product risk event, including the market background of "negative oil price" and the whole story of the crude oil product risk event. Then the paper concentrates on the reasons why the Bank of China issued such a high-risk products and the rationality of product design, product attributes and product innovation. Who should be responsible for the crude oil product incident is also discussed through the contract analysis. Finally, through the analysis and reflection of the lessons, this paper puts forward the methods and relevant suggestions to improve China's financial management.