The Research Of Asset Securitization Based On Regulatory Capital Arbitrage

The new Capital Accord allows that the commercial banks make use of asset securitization to carry out credit risk mitigation, which lead to the release of regulatory capital and the expansions of business assets under the circumstances of not reducing the total risk in the commercial banks. However, this regulatory capital arbitrage behavior, massively reduced the effectiveness of capital regulation, and increased the systematic risk of the entire financial system. China's banking industry will gradually implement the new Capital Accord in order to align with the international. However, since China still has not the specific securitization law, many systems are grossly inadequate, and then it must research how to implement credit risk mitigation techniques. The last financial crisis also shows that the assets securitizations on the basis of regulatory capital arbitrage are imminent, and this is directly related to the law-making of specific securities.This paper, divided into four chapters, mainly discussed the systems and approaches in the process of regulatory capital arbitrage, then analyzed the positive and negative effects which would be introduced into the asset securitization based on the regulatory capital arbitrage, while discussed the shortcomings about the systems related to asset securitization in China and the risk of risk remoteness systems. Finally, effective accounting recognition methods about true sale in the processes of the asset securitization were be discussed, while how to treat and control the risk of risk remoteness systems was also discussed.