Research On Mortgage Backed Securities In China, Lessons From Subprime Crisis Enlightenment

In August 2007, the global financial crisis caused by the U.S. sub-prime mortgage crisis became more and more serious. The sub-prime crisis not only causes the U.S. financial industry face unprecedented turmoil; but also its potential agitated quickly spread to the world, the United Kingdom, Continental Europe, Australia, Japan , South Korea, all countries have been a run on banks, the stock market have tumbled, the world economy as a whole is also a recession.In the U.S. sub-prime crisis, the causes of research, many scholars believed financial innovation - asset backed securitization led to the sub-prime crisis. But get to the bottom, sub-prime crisis rooted in neglect of risk management. Financial innovation, from the generation of sub-prime crisis, the entire operation process, including decentralization of sub-loans, the loan securitization and leveraged finance operations, point of view, the key is greed of profit, disregard for the risk of bad loans led to the widespread and innovative manner. The reason for sub-prime crisis is not financial innovation but the neglect of risk control of financial innovation.Financial innovation has great features, thought it also brings great risks. By the large-scale growing of China's housing mortgage loans, "short-long loan deposit" issue is increasingly conspicuous. Liquidity risk of commercial bank is increasingly apparent accordingly. Asset backed securitization can reduce the risk of banks directly or indirectly.The extent of financial innovation in China is not developed, so that the impact of the financial crisis should not stop the pace of China's real estate mortgage loan securitization.By the analysis of emergence and development of mortgage-backed securities, by the research of 10 years' development of real estate in China from the beginning, by the statistics data of important economic data, and by the deeply investigation of reasons of the U.S. sub-prime mortgage crisis, we've got some inspiration and points for our development of real-estate mortgage-backed securities. The research also helps us to get some suggestions and countermeasures to the implementation of China's real estate development of mortgage-backed securities.