Failure Case Study of Operational Risk Management of Wealth Management Institution — Taking the 2025 Zhejiang Financial Assets Exchange (ZFAE) Default as an Example

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Authors: Zixuan Lin
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Abstract

In recent years, the deepening development of China's financial market and the continuous accumulation of household wealth have jointly driven the rapid expansion of the wealth management industry. However, some institutions have suffered from frequent operational risk incidents due to corporate governance deficiencies, lack of internal controls, and regulatory arbitrage behaviors, seriously threatening the legitimate rights and interests of investors and the stability of the financial system. The "Zhejiang Financial Assets Exchange (ZFAE) Product Default Incident" exposed in 2025 is a typical example. This incident involved the delayed redemption of 23 wealth management products, with the unpaid principal amount reaching approximately 11.7 to 20 billion yuan, affecting over 12,000 investors and triggering widespread public concern. Taking this case as the research object, this paper systematically analyzes the event evolution, organizational structure characteristics, product design logic, and risk transmission pathways, revealing multiple institutional loopholes in operational risk management, including: failure of governance structures, ineffective compliance mechanisms, severe distortion of information disclosure, lack of risk isolation mechanisms, and systemic regulatory arbitrage behaviors. This study deeply diagnoses the root mechanisms of risk formation and proposes targeted improvement suggestions, aiming to enhance the operational risk management efficiency of financial institutions and provide theoretical references and practical basis for the improvement of regulatory policy systems.

Fields of Study & Subjects

finance banking and market dynamics Risk Management in Financial Firms Finance Markets and Regulation

Publication details

Journal / source
Economics & Business Management
Volume
4
Issue
2
Pages
41–41
Publication date
15 January 2026