China's Commercial Banks Non-performing Assets Securitization-related Issues Discussed

China's banking industry has long been subjected to non-performing assets (NPLs),and thus NPLs has always been an important research question.Since the traditional means of disposal of NPLs was inefficient,how to improve the efficiency of disposal of NPLs and how to innovate disposal means of NPLs have become a significant topic of China's banking industry.China's government lowered the defective rate by establishing four asset management companies and conducting two large-scale NPLs disposal.However,with the completion of shareholding system of state-owned banks and diversification of capital structure,it is unfair to use public resource to conduct NPLs stripping off.Therefore,to explore the market-oriented method of disposal of NPLs become a hot research topic.Assets securitization is one of the most significant and fastest-growing financial innovations in the last twenty years.In addition to the fundamental function of financing,assets securitization has become a mature approach of disposal of NPLs. In recent years,employing assets securitization to deal with the financial NPLs has become a hot topic of domestic academe.Moreover,China's regulatory authorities encourage financial institutions to do financial innovation and employ diversified approaches to do NPLs disposal,as well as offer relevant supporting policies.In fact, some of asset management companies have attempted to do so.For example,China Construction Bank(CCB)issued"Jianyuan 2008-1 re-engineering assets securitization",and this issue means that commercial bank start to launch assets securitization products of NPLs.Based on the material connection and the introduction and evaluation of case study,this study focus on the analysis of assets assessment and accounting recognition of sponsor.Furthermore,this research makes some suggestion about the practical operation.Additionally,the author choose the assets evaluation and accounting recognition of sponsor as the research keynotes of this paper because the above two questions are closed to the benefits of investor,directly refer to whether the core demand of initiator and investor can come true and have decisive impact on the securitization improvement of NPLs.There are a lot of works about the assets assessment and initiator accounting confirmation.Moreover,most of these works employed the method of introduction and comparison of international advanced experiences and conducted theoretical research.The main innovations in this paper can be concluded as the following two points.First,based on assets valuation research,which deeply analyses the reasons of the comparable bigger Non-performing assets evaluation errors and depends on the existing technical conditions,this study proposed that it could decrease Non-performing Assets by designing the securitization transaction structure of Non-performing Assets.Second, based on the research of accounting recognition of initiator,this study analyses the accounting recognition system of China and then proposes the recommendations about accounting recognition system by comparing the international advanced experiences and research results.