Research On The Operational Risk Management Of Asset-Backed Securitization Of China Development Bank Qinghai Branch

As the largest medium-and-long-term credit bank in China and the largest developmental financial institution in the world,China Development Bank(CDB)has actively promoted the preparation,organization and issuance of “Kaiyuan” series Asset-Backed Securitization(ABS)products since the pilot of first batch of ABS in China in 2005.From 2012 to 2018,as the institution with the largest amount of issuance in the ABS market,CDB has issued the ABS products of more than 300 billion yuan in total,which accounted for more than 20% of the domestic market share.As the first-level branch established by CDB in Qinghai Province,CDB Qinghai Branch has been actively preparing,arranging and managing securitization products by cooperating with the head office since its establishment.However,affected by the macroeconomic downturn in Qinghai Province,the ABS of Qinghai Branch encounters a series of risks,and the operational management of ABS also exposed many problems.Therefore,how to carry out the securitization business more rationally and manage the operational risks more effectively has become the focus of the branch.The paper takes the operational risks existing in ABS of CDB Qinghai Branch as the research subject.Firstly,it summarizes the works and literature related to operational management and ABS.Secondly,it carries out analysis of the current situation of risk management for ABS business of CDB Qinghai Branch and finds out that the branch is limited to the supporting degree of the information system,moreover,the relevant risk identification and analysis work are mainly conducted by the subjective judgement of the staff.What is worse,there is no scientific,objective quantification and evaluation procedure for the risks found out;the risk management plans which are currently implemented by the branch are supposed to be improved;there is no effective monitoring and control for the implementation of risk management plans.Thirdly,the paper identifies 31 categories of risks in total within three stages of ABS operation and management which are respectively the prestage,middle stage and post stage by relying on questionnaire,interview,expert discussion and other methods.Furthermore,it also classifies the 31 categories of sub-risks into seven risks as credit risk,regulatory and reputational risk,risk of loan factors change,other risk,operational risk,prepayment risk and liquidity risk.After adopting the AHP and FCE to quantify the risks,conducting relevant calculation and analysis,the paper finds out that in the seven major risks,the ones with common influence degree are regulatory and reputational risk,prepayment risk,risk of loan factors change and credit risk;the ones with influence degree lower than common risks include other risk and operational risk;the one with relatively lower influence degree is liquidity risk;the overall risk evaluation exceeds the common level.Therefore,the mechanism and strategy for ABS operational risk management are to be further optimized.At last,with thoughts and experience in practical work,the author puts forward the strategies for operational risk management of ABS business within the branch.At the same time,it also lists the measures to guarantee the implementation of the risk management strategies from four aspects as management system,training,HR and information technology,and estimates the effects of strategy implementation.This paper innovatively analyzes and evaluates the risks of ABS within Qinghai branch from a perspective of operational management,and provides a new research perspective on the ABS risk management.Meanwhile,based on the actual situation of Qinghai branch,this paper formulates feasible strategies for operational risk management and provides references for Qinghai branch and other financial institutions to improve the operational management and risk management mechanism of ABS.