The Research For MBS Development In China

As a financial tool, MBS was developed in USA in 1960s.After a rapid development, the market for MBS became the second important bond market. Beside USA, MBS also was developed dramatically in European and Asia. MBSs are a specific type of asset-backed securities (ABSs), which are claims on a stream of cash flow from financial assets, usually in the form of receivables. MBSs are backed by a stream of cash flows from mortgage credits provided by an originator (usually a bank). MBSs are an effective tool for balance-sheet management for originating institutions, which can take the securitized loans sold without recourse off their balance sheets. By channeling funds from domestic bond markets to domestic housing markets, MBSs link the wholesale and retail credit markets. That is why reasonably efficient bond and housing markets are crucial for the efficient operation of domestic MBSs markets. And conversely, distortions and other shortcomings in domestic housing and bond markets weaken the MBS markets. This paper will be divided into five chapters to research on the development of MBS in China. The detail arrangement is as followingChapter 1 will explain what's MBS, what's specific features about MBS and what's the general application process of MBS.Chapter 2 will search on the development history and experience of USA, British and Japan, which will be as reference for the development in China.Chapter 3 will demonstrate the necessary and feasibility of establishing MBS markets in China. This research will focus on two instruments: Mirco-aspect and Marco-aspect.Chapter 4 is the most important chapter in this paper, which will research on how to deal with system of obstacles of MBS in china.The last chapter will refer to how to control the risk of MBS in China.