| Asset securitization products were initially born in 1970’s. Due to its good development in capital markets of foreign countries, these products have been put in an important position in the financial community especially in banks industry. They were highly praised as a way to deal with the bad loans of the banking industry and an innovative mode of bank assets’management. Until the outbreak of the subprime crisis in 2007, asset securitization products have played an important role in American financial markets.Although asset securitization products started late in Chinese market, it made a significant contribution in promoting the management level of Chinese banking industry, improving capital’s efficiency of use and comprehensively increasing the liquidity, profitability and safety of banks. The rise of Asset securitization in China will promote the corresponding development of the stock market and accelerate the pace of securities market towards a mature stage.Chinese commercial banks, on one hand, play an important role in economy of China, on the other hand, appear some potential problems such as high concentration of risks and lack of liquidity and so on, because banks have accumulated a lot of credit assets for the past many years due to its historic mission. Through asset securitization, Chinese commercial banks could effectively spread risks, gain higher profits and enhance the competitiveness of Chinese banks in international markets.This paper makes analysis on how to resolve the securitization of commercial banks’bad loans. Chapter One introduces the concept of asset securitization, the development history of asset securitization in the United States and the development of asset securitization in Chinese commercial banks. Chapter Two mainly discusses the feasibility of asset securitization in China. Firstly, this chapter analyzes the significance of asset securitization for the development of Chinese banks in regards of improving the traditional liquidity, safety and profitability of state-owned commercial banks’asset. Then, it introduces the basic conditions of asset securitization’s implementation, including the bank’s internal conditions and external conditions such as market environment and other supporting laws and regulations. Chapter Three is an introduction to securitization implementation strategies of the state-owned commercial banks’ non-performing loans. Considering the basic principles of asset securitization and its operational processes, the writer puts the theory into practice and cites a specific case of asset securitization to vividly describe its implementation.Chapter Four focuses on the asset securitization’s difficulties of Chinese commercial banks, and puts forward the author’s own thinking. Those difficulties lie in carry out of asset securitization in China. The problems are not only that we do not have a correct understanding towards the concept of asset securitization; rising of credit rating level of non-performing loans stand by securities is favorable for securities’ issuance and circulation; In the process of securitization, external systems such as market system, foreign exchange management system and authoritative rating agencies and so on need to be further improved and the corresponding legal system also need to be improved; set of guiding principles of accounting and taxation policies involved in asset securitization is a must; training specialized professionals is also an important measure of advancing the development of asset securitization; Finally, it makes recommendations on how to steadily carry forward asset securitization in China.The main contribution of this paper is providing a new mode for the banks on how to change the traditional passive way of assets management into active management of assets when the banking industry is facing the disposal of a large number of bad loans at the present. Asset securitization provides a new way of improving the management level of banks and comprehensively increasing the liquidity, profitability and safety of banks’assets. Therefore, the implementation of asset securitization in the banking industry plays a very positive significance. Through analysis on theory and practice of asset securitization in foreign countries, this paper proposes the feasibility and specific programs of implementing asset securitization in China. Finally, it puts forward the difficulties and problems of Chinese state-owned commercial banks in the process of asset securitization, and gives corresponding solutions for these problems. In regards of asset securitization’s understanding, it is not simply carried out for dealing with the bad loans, actually, it is an innovation of bank management; In respects of market conditions of asset securitization, it puts forward corresponding requirements for all sides in market, the main laws and regulations, accounting principles and tax policies. These will promote the maturity of Chinese financial markets, at the same time, these will provide reference for other banks when they carry out asset securitization for bad loans in the future. |
