The Critical Step & Environmental Support Of Asset Securitization

Asset Securitization is one of the most important financial innovations in the international finance field in recent several decades. It breaks the current law, accounting and tax regulations through its wonderful contract arrangement, inducing the disintermediation in the finance market. This thesis try to introduce the operation process of Asset Securitization, and focus on the two most critical step in Asset Securitization: the selection of the initial asset and the credit evaluation and enhancement. As to the application of Asset Securitization in China, I study the practice in west countries and the native regulation circumstances, and ultimately I propose several suggestions. This thesis consists of six parts:Part one: the structure and operation process and the type of Asset Securitization. This section mainly introduces the rights and obligations of parties involving in Securitization, also compares three kinds of ABS in their cash flow design, collateral and potential recourse arrangement.Because the Asset Securitization has its obvious financial innovation sense, its credit feature is different from the traditional financial method. According to this, part two discusses its special finance characteristic.Part three lists benefits contributed by Securitization to originator, investor and Securities Company, also emphasizes the influence to macro-finance market.Part four is the main body of this thesis, mainly discussing which kind of assets is feasible for Asset Securitization in China: real estate mortgage loan, fundamental construction credit and part of bad assets at the four state-owned bank. Because the issue of bad assets at bank is more complicated, I specially introduce it in detail.Part five: It introduces the other critical process of Asset Securitization: credit evaluation and enhancement of ABS.Part six analyses the law, tax, accounting and risk management obstructions in applying Asset Securitization in China, and presents several proposals for regulation based on practice experience in west countries.