Development Models And Countermeasures Of Securitization In China’s Commercial Bank

With the rapid development of commercial bank’s financing business in China recently,project funds regarding real estate and government financing platform have been grinding higher.As rate of bad debts increasingly rising due to radical business development,it becomes a major problem confronting financial institutions and regulators to be solved.Securitization of credit asset should be a way to solve the problem of bad debts.In the United States,asset-backed security has always been a major part of the debt market.By securitization,financial institutions may stripping bad debt off to and settle the problem consequently.Securitization is a business model essentially,it focuses on to sell the commercial banks’dedt which is listed on the left side of balance sheet.Duration of commercial bank debt will be reduced;balance sheet will grow healthier;cash and securities will replace the original loan;the total risk of assets will decrease and the corresponding capital requirements will lower by credit asset securitization.Therefore,the asset securitization to improve the bank’s financial indicators are more obvious.The development of asset securitization in China and it has lagged behind the development of China’s financial markets since the 2008 subprime mortgage crisis,it is suspended asset securitization approval until 2012 restart.It can be said that China’s current asset securitization is still in its infancy,there are still many problems,whether legal,technical and other related facilities are not perfect.With the liberalization of the regulatory level,support the current status quo policies,and banks can be expected bank credit asset securitization is bound to rise,more and more banks realize the role of asset securitization in dealing with non-performing assets,asset securitization will be widely used in domestic commercial banks.At the same time,we should also learn from foreign experiences and learned in the process of asset securitization business should not be designed in multiple structure,asset package should be clear,and the lever should be controled,the risk sufficiently dispersed inside the financial system to avoid a repeat of 2008 the US subprime mortgage crisis again.