Study On Credit Enhancement Method Of Non-performing Asset-backed Securities

The banking industry has always been the backbone of the development of China’s financial market.However,according to the survey data,the non-performing loan problem of commercial Banks has been a major obstacle to the development of China’s banking industry,and in recent years,the non-performing loan problem of commercial Banks is also getting worse.The traditional methods used by commercial Banks to solve the problem of non-performing loans in the past tend to take a long time to deal with and have low efficiency.On the other hand,as a new financial instrument to deal with non-performing loans of commercial Banks,non-performing asset securitization has played a positive role in improving the liquidity of assets,realizing the listing of non-performing assets and reducing the operational risks of Banks.In recent years,it has been gradually valued and developed by the state.However,China’s non-performing asset securitization business started late,and the pilot work of commercial Banks’ non-performing asset securitization was restarted in 2016.There are few relevant researches,especially the more important link in the non-performing asset securitization business--credit enhancement.Therefore,relevant analysis and research are carried out on the credit enhancement measures of the issued NPL securitization products,and improvement Suggestions are put forward,in the hope of helping other commercial Banks to issue NPL securities to improve the credit enhancement measures,so as to promote the development of China’s commercial Banks’ non-performing asset securitization business.The case product selected in this paper,gongyuan zhicheng,the second phase of non-performing asset-backed securities in 2019,was issued by industrial and commercial bank of China.Industrial and commercial bank of China(icbc)is a large state-owned bank in China and one of the first pilot Banks for non-performing asset securitization of commercial Banks in 2016.Therefore,it is of great significance to analyze and study the credit enhancement measures of non-performing asset securitization products issued by icbc.This article through to the work of the industrial and commercial bank of China issued yuan zhicheng in 2019,the second phase of the non-performing asset backed securities credit promotion measures are analyzed,the study found the credit promotion measures of asset pool filter some deficiencies,and hierarchical design is relatively single,liquidity reserves account ofthe enhancement effect is not obvious,at the same time China non-performing assets securitization of credit enhancement business related laws and regulations also is not perfect,the lack of a unified legal system.Therefore,in view of these problems and in combination with the actual situation of our country,at the end of the article,the paper puts forward Suggestions on improving the credit enhancement measures,and puts forward Suggestions on further promoting the development of the credit enhancement measures of non-performing asset securitization in our country.It is hoped that through the analysis and study of case product credit enhancement measures in this paper,it can provide reference experience for other commercial Banks to issue NPL securities in China,so as to promote the better development of NPL securitization business in China.