The Impact Of Credit Risk Transfer Tools On The Risk Of Commercial Banks

As a typical financial innovation, credit risk transfer has been an unprecedented development in recent years. However, the rapid development of CRT market is considered to be the main causes of the financial crisis. As the main participants in CRT market, commercial banks have been seriously challenged.The study focuses on the positive and negative impacts of CRT tools to the risk of commercial banks and the empirical research on corresponding risk indicators. We first introduce the CRT tools, including asset securitization and credit derivatives, and the performance of CRT market after the financial crisis both in China and abroad. Secondly, according to the function and the role of CRT tools, we study the negative and the positive impact of CRT tools, discusses the impact of credit risk transfer on the banks of the two opposites through the point of views of the structure and transaction processes of a typical CRT tools. On this basis, select the impaired loan ratio and the current ratio of commercial banks as the risk indicators. We analyze the influences of the credit derivatives through the empirical of panel data. Then we show the impact of credit risk transfer on the bank's credit risk and liquidity risk based on the results of the empirical analysis. The results showed that the use of CRT tools may have different effects on the bank's credit risk and liquidity risk. Finally, we give some suggestions of the development of CRT market in the future.