The Research On Asset Securitization And Risk Taking Of Chinese Commercial Banks

Under the context of new economy status in China,the commercial operation of commercial banks has gradually entered a new stage of development.After a period of preparation and exploration,China restarted the asset securitization business,which provides a new source of liquidity for commercial banks.However,the Chinese regulatory authorities for asset securitization business has been followed by orderly liberalization of ideas according to the view of the negative effects of asset securitization in U.S.financial crisis.From the foreign literature,the research on asset securitization has accumulated a grateful achievements,and the positive and negative effects of securitization have been widely discussed.Considering the asset securitization is able to increase the degree of market activity and improve the liquidity of commercial banks,therefore,the asset securitization plays a positive meaningful role in promoting in limited fields.However,as it may affect the operation of commercial banks have a negative impact,there should be a reasonable control on the scope and speed for securitization.At this stage,some Chinese commercial banks have started asset securitization business,but there is lacking of sufficient empirical study.Thus,this paper will make the China's commercial banks as panel data in the research sample to explore the specific impact of asset securitization on the risk of commercial banks.In the analysis,this paper considers how asset securitization influence Chinese commercial banks'overall risk-taking,risk appetite,credit risk-taking and liquidity risk-taking into four parts.According to this study,the conclusions are as follows:(1)The commercial bank do bear risk on asset securitization,and the development of asset securitization can effectively reduce the level of risk-taking.In addition,the asset securitization business of commercial banks has heterogeneity in its risk taking,and the impact of asset securitization on the risk is dependent on the bank's characteristic variables.The effect of asset diversity,asset size and asset return on the risk of commercial banks is partly offset by the impact of asset securitization,and the commercial banks which have more types of asset,large scale,and stronger profitability will rise its level of risk taking while using the asset securitization.Besides,the capital adequacy ratio,liquidity levels have synchronous effect on commercial banks' risk-taking on asset securitization.The higher capital adequacy ratio,strong liquidity of commercial banks in the asset securitization business will make the risk level to decline further.(2)More expanding of asset securitization of commercial banks will improve the level of capital buffers,which enhance the commercial bank's risk compensation capability.Commercial banks will have a high capital cushion by increasing the capital level of commercial banks,which will result in reducing their risk preference.(3)The securitization of commercial banks will lead to the expansion of bank credit.It is still needed to pay attention on even without a high degree.The purpose of securitization is to facilitate the liquidity shortage of banks to a more reasonable asset allocation,while promoting and improving its operating efficiency.Therefore,it has a significant meaning for expanding the asset securitization business.Meanwhile,it will make a raise in its credit growth.From the view of operation,the commercial banks have motivation to expand further asset securitization to gain more asset size.From the perspective of the impact of asset securitization on the asset structure of commercial banks,the development of securitization has a significant negative impact on the proportion of corporate loans,and has no significant effect on the other two types of loans.With the expending scale of commercial bank asset securitization business,underlying assets,and scope of business gradually in the future,the portfolio effect will gradually appear which is brought from asset securitization.The commercial banks will also adjust their asset portfolio to maximize their profit.(4)The rise of the scale of commercial banks' securitization will lead to the increase of liquidity level.This indicates that the purpose of commercial banks to start securitization business at this stage is still committed to improve their liquidity level,which means,the development of commercial banks securitization business will help to reduce the overall level of risk taking.Furthermore,the empirical analysis shows that the scale of commercial bank securitization has a significant negative impact on its financing structure.Although the effect is not high,it has shown a trend established.With the expanding scale of asset securitization,this feature would be more obvious,and the commercial bank will have a wider financing methods.At the same time,the source of financing will be more reasonable,which will a positive effect on its business and development significantly.Based on the panel data of Chinese commercial banks,this paper analyzes and discusses the impact of asset securitization on the overall risk-taking of commercial banks,credit risk-taking,and liquidity risk-taking,etc.From the empirical results of this paper,the present stage of commercial bank asset securitization has a positive effect on their business.Securitization has a positive impact on improving bank liquidity,and promoting the steady management and operation.Especially,with considering downside situation of current economy and the lack of liquidity source of commercial banks,securitization has more practical significance meaning.However,it might bring a series of negative effects which are needed to pay more attention on.The development of the securitization business should follow the principle of gradual and orderly.Meanwhile,the corresponding regulatory framework,regulations and laws should be introduced at an appropriate time.The development of new business is often difficult to predict,thus,the regulators should control the pace of development of securitization business and strictly review the information and quality of basic assets to avoid the business chain is too long to increase the difficulty of supervision to ensure that securitization business could be expanded under control with the minimized negative effects.