Research On U.S. Asset Securitization

With the rapid development of financial technology and the arrival of the globaleconomic integration, competing in world economy, the governments all over theworld are facing unprecedented pressure for financial innovation. There are greatchances and challenges for development. Asset Securitization, one of the importantmeans of financial innovation, subjects to the general concern of the world, tobecome one of the important contemporary research areas. Asset securitization refersto the process of illiquid assets on financial markets through structural design, creditenhancement, credit rating means convert into securities that can be traded freely, soliquidity. As a financial innovative idea and method appeared in recent years Assetsecuritization is propitious for effectively managing economic and financial risks forcountries, and provides a new way to promote the investment and functions offinancial markets and to maintain economic development. Asset securitizationproducts are important varieties of mature capital market, from a managementperspective and financial innovation point of view, to the increasing demands of changing banks, businesses and the wider community of investors. Assetsecuritization theory as well as the construction of the research and its innovativeapplications is very necessary, and also the inevitable choice of modern financialmanagement.Asset securitization is originated in the United States, and the world’s largestasset securitization market is also in the United States, therefore the U.S. experiencein the innovation and application of financial instruments are emulated by countries.The United States is boosting the world’s representative of economic development.Despite the asset securitization culprits U.S. subprime mortgage crisis broke out in2007, the U.S. asset securitization market has not disappeared, and the rapidadjustment makes the development of asset securitization more benign. According tostatistics of the U.S. Securities Industry and Financial Markets Association, theissuance of the asset-backed securities in the United States is$1786.4billion in2011,and$2264.5billion in2012, second only to$2308.8billion of the issuance of theU.S. Treasury. In contrast, the practical application of asset securitization is at anearly stage in China, since the first asset-backed security in2005and the stagnationby the impact of the financial crisis in2008，the assets securitized products has beenissued￥66.785billion. Although influenced by the subprime mortgage crisis, the practice of asset securitization in China is continued. September7,2012,10.166billion yuan of asset-backed securities were issued by CDB(China DevelopmentBank), the central bank, and China Banking Regulatory Commission also announcesa further expansion of asset securitization. The process of asset securitization inChina will continue to accelerate.So why does the U.S. asset securitization market scale grow up rapidly andeventually being the top U.S. bond market, once even beyond the scale of U.S.Treasury bonds? Why does the U.S. government attach importance to this financialinnovation tool? What issues does the U.S. subprime mortgage crisis reflect? Whatsupervise adjust and reform have been done? Under the new form of economy afterthe subprime mortgage crisis, how to learn from the experience of the U. S. to graspthe actual asset securitization practice in China is the important issue that needs to beaddressed in this article. Therefore, this paper systematically studies on the origin,evolution, construction, characteristics, operation, supervision and other issues ofasset securitization in USA. Based on the longitudinal analysis at the point of thecrisis and the horizontal comparison between the actual situation of China and theU.S., Further rationalization to guide the operation of asset securitization in China isgiven at last.The thesis mainly achieves six aspects, as following. (1) Totally analyze the main content of asset securitization on the basis ofreviewing of the literature in the world, emphasizing on the newest achievement anddevelopmental direction of asset securitization, and finally determine to research theasset securitization of USA.(2) On the basis of analyzing the basic concept, characteristics and categories ofasset securitization and information asymmetry, institutional economic principles areformulated. Then the great value of attaching importance to these principles in theresearch and practice of asset securitization is provided.(3) Then analyze on the development of US asset securitization in-depth.Starting from the origin of the U.S. asset securitization, especially focusing on thehistorical development process and its characteristics of each stage of development,the motivations of asset securitization are analyzed, clarifying the background from ahistorical perspective.(4) Penetrating the historical features of the US asset securitization development,the operation mechanism and characteristics have been expounded, mainly includingthe unique asset pooling mechanism, the Bankruptcy Remoteness mechanism, creditenhancement and credit rating mechanism, and the adjustment of the operationmechanism after the subprime crisis of assets securitization is analyzed.(5) The subprime crisis exposes the shortcomings of the American financial supervision of asset securitization and related legal system. In this direction, thesafeguarding of asset securities supervision mode and the arrangement of legalsystem are expounded, focusing on the analysis of supervision mode change andrelated system arrangement after the crisis.(6) Through the study of the development experience of American assetsecuritization and the existing problems, based on the estimate of the improvedmeasures and implementation effect, the direction of Chinese asset securitizationdevelopment and some measures and suggestions are given on the occasion of therestart of asset securitization in China.At last, the research fruit and the innovative parts are summarized in this thesis.Following that, the need of more research work is pointed out.