A Study On The United States Subprime Mortgage Crisis And The Lessons For China's Asset-backed Securitization Development

July, 2007 at the background of Asian financial crisis happened for ten years, the subprime mortgage crisis in real estate market in the United States began at an alarming rate and quickly spreaded to the entire United States financial markets, such as New Century Financial, Bear Stearns, Lehman, those so called the superstars among the United States financial institutions after the situation going out of control, eventually led to a financial tsunami, letting the leaders down , groping in the dark to find a way out. Our country since the central bank has announced in 2005 that the National Development Bank and China Construction Bank as a pilot unit for credit asset securitization and mortgage securitization, they would officially set foot on the path of asset securitization. However, in the face of this so called "unprecedented" financial crisis, there is a need to seriously consider our summary of the crisis brought about by the experiences and lessons of danger in times of peace and gain an inspiration to ensure that asset securitization can successfully be implemented in our country for our country to further develop our financial markets.In this paper, I mainly use the way of literature study, through a lot of reading, to know about the sub-prime crisis; China's current theoretical research in asset securitization;asset securitization market as well as information on the status quo, thereby fully and correctly understanding the need to study relevant aspects of the issue to lay a solid theoretical foundation. At the same time I also use a qualitative analysis of law ,collected from the literature summarized data synthesis ;deduction on this basis eventually make their own meeting about the debt crisis on our country the implementation of asset securitization, as well as our country the next revelation asset securitization road views on the development of policy recommendations. Although there were already substantial asset securitization research literature at home and abroad ,the innovation of this article is at the background of the debt crisis in the United States to re-examine the development of capital securities of the road.This article discusses the crisis in the aspects of the course of development, as well as sub-loan crisis, asset securitization research for the development of our country, although China's current asset securitization market is just at the developing stage, whose scale and influence are far less than the United States, not to having similar conditions for the sub-prime crisis, drawing lessons is very meaningful.Chapter II of this article focuses on asset securitization research theory and literature review. Asset securitization as a new type of financial instrument is lacking of liquidity, but can produce predictable and stable cash flow of assets through a certain structure of assets and income elements of the risk of separation and restructuring, then converted in the financial market can be sold and securities circulation process. And compared to traditional financing instruments, asset securitization are income-oriented, structural, sheet and low-cost means of financing and because of these characteristics the participants of all ages are fond of it. And asset securitization operating in a unique way and the core principle also determines its special features. In addition this chapter also discusses the background of the sub-loan crisis in the background, causes and hazard analysis, asset securitization and credit risk through a decentralized communication credit market and capital market once a great impetus to the United States subprime mortgage market, but because of many reasons such as failure of the Federal Reserve's monetary policy; the United States blindly the mortgage lending financial institutions, lack of supervision; the real estate credit institutions'risk control are not in place; the United States investment market, as well as the global economy and investment environment for a period of time over the past years, sub-loan crisis led to a loss of direct investment countries; reversed international capital flows ; trade protectionism and other hazards.Chapter III of this article is mainly about China's current asset securitization development, broadly divided into three parts: (A) the assets of our country's development process of securitization. Since 1992, Sanya Real Estate Investment Certificates have issued to the present domestic enterprises Asset Securitization. Asset-Backed Securitization in China has experienced a short and rapid course of development. (B) the purposes of offering asset securitization and its feasibility. (C) At present our country realize the process of asset securitization and the reasons for the existence of the problem, including the legal system , the obstacles, imperfect investment climate, lack of investors. The debt crisis in the United States at the outbreak of the United States not only exposed the drawbacks of the implementation of asset securitization process,but also gives all over the world especially our country as a country which just emerges some important inspiration and referential significance. Chapter IV of this article so that the United States sub-loan crisis on our country the development of asset securitization Enlightenment, specifically including (A) Improve the quality of basic assets . At present, our country's basic asset of securitization are financial assets, which inevitably will face the risk of the impact of the financial system, so carefully selection of the basic assets of our country can guarantee the smooth progress of asset securitization key. (B) to put eyes on credit rating agencies and other intermediary agencies trust the operation and management. Market, investors often are the basis of credit rating agencies announced the evaluation of financial assets to make their own purchase decisions, and therefore the event of asymmetric information, lack of accuracy of credit ratings and so on, investors will be difficult to make the right risk judgments, thus affecting asset securitization of profit. (C) to strengthen the awareness of the process of securitization of risk prevention. As an instrument of financial innovation, asset securitization contains a wide range of risks, including macroeconomic risk, financial risk, legal risk policy and so on. Therefore, in face of this large number of complicated factors, we must always maintain a high degree of vigilance. (D) the development of China's real estate market . Currently, China's housing market is experiencing a substantial influx of funds, housing prices, mortgage loans personal rapid expansion phase, therefore in a sense, the carefully studying the causes of this crisis is very important for our country.About the future of our country's road to asset securitization, domestic scholars have varying degrees of researching and have given a variety of opinions and suggestions .This article is mainly directed against the above-mentioned asset securitization market of our country problems and obstacles, in reference to the results of a large number of research based on my own views. (A) Standardizing the financial derivatives market, strengthen the supervision of financial innovation. With the United States vis-à-vis developed and sophisticated of the asset securitization market, China's asset securitization is still in its infancy stage, the laws and system is not perfect, the lack of asset securitization to promote the development of legally binding and system security, therefore, various regulatory department should strengthen the system of financial innovation for the construction and legal constraints. (B) Carefully select basic assets, and promote innovation. Our country's currently market asset securitization product is relatively simple, this is not only detrimental to the smooth progress of asset securitization, but also more concerned with our country to vigorously develop the capital market. Therefore, there should be expanded basic asset securitization varieties, from the beginning of credit assets to all kinds of financial assets and securitization of corporate assets. (C) Sound financial markets, protecting the asset securitization financing environment. A transparent, full information illiquid securities issue and trading of asset securitization market is also the fundamental guarantee of success, so we should be committed to sound financial markets, protect the smooth flow of information to avoid moral hazard. (D) Cultivate intermediary organizations, professionals, investors and market participants. To expand the scope of eligible investors, allowing insurance companies and pension funds and other institutions and even a range of individual investors to invest in asset securitization products, and increase efforts to cultivate investors. (E) Encourage the involvement of small companies, broadening their financing channels. China's market now is on the prevalence of liquidity excessive, but large banks are reluctant to provide loans for small and medium-sized companies. Small banks also suffer limited financial resources, but the emergence of asset securitization is about to resolve this problems.