| In 2005, the first residential mortgage-backed securities was issued by the Construction Bank of China. Subsequently the Postal Saving Bank of China and the China Merchants Bank followed its footstep by introducing a trial implementation. So far there are as many as four loan securities available in the market. In the last ten years, the securitization of housing loans propelled slowly. While the property market is thriving the importance of the loan securities is becoming noticeable since it was gradually adopted as another source of financial support and a new investment choice. It is believed along with the progression of financial reform the mortgage-backed securities will demonstrate its great potential in the foreseeable future.In this essay the analysis has been made on how the housing loans were securitized in China. A few possible paths for the development of the mortgage-backed securities are discussed after comparing with the experiences of other countries. As one of the financial products, default is regarded as the major risk. In this essay the qualitative and quantitative methods are employed in the analysis of the risk management based on the financial theories and case studies. At last, proposals have been made on how the banks could reduce the risks in the mortgage-backed securities after the discussion of the influence factors. |
PDF Full Text Request