Reflection On Legal Issues With Regard To Asset Securitization After Subprime Mortgage Crisis

Asset securitization is one of the most important financial instruments in current international financial market. Through its ingenious structure, it can help to carry out a low-cost financing for promoters, vitalize the idle assets, meet the needs of capital adequacy ratio and diverse investments; however, something negative of asset securitization has been exposed since the subprime mortgage crisis in 2007. This is a crisis not only make asset securitization controversial, but also drop the pilot project of asset securitization in China into the bottleneck. Positive meaning of asset securitization should be affirmed, but it has become the focus that whether it should continue to operate asset securitization and how to overcome the negative effects of asset securitization under heavy pressure.This thesis aims at pointing out the issues in the use of asset securitization and putting forward proposal for the further development of asset securitization in China, through analysis of the structure and related system of asset securitization, focusing on the bankruptcy remoteness, inherent contradictions in the transfer of assets, supervision and social responsibility, in the method of comparative analysis, historical analysis and dialectical analysis, combined with the knowledge of law and philosophy and domestic and international scholars'suggestion for reference. This paper is divided into four parts: asset securitization, affirms the basic structure that is recognized by all countries, paving the way for the following extended discussions.The second part discusses the major legal issues of asset securitization, depth profile the bankruptcy remoteness and transfer of assets as the main line. First, in view of bankruptcy-remote mechanism, depending on the situation, the paper analyzes two situations of bankruptcy and discusses different issues with regard to different forms of special purpose vehicle, points out the embarrassment of legislation, advances that the interest of other creditors should be considered in bankruptcy; followed by asset transfer, the paper analyzes the advantages and disadvantages of several major ways of transferring asset and encourage diversification of asset securitization. On this basis, the paper summarizes two internal contradictions of asset securitization, indicating to respect the inherent contradiction in developing asset securitization; otherwise the two sides of the contradiction will lose balance.The third part rethinks the external system of asset securitization through the reflection of subprime mortgage crisis. First, it gives a brief introduction the subprime crisis; Second, it reflects on asset securitization-related systems based on the analysis of the causes of the crisis one by one, reflecting a incomplete financial regulatory system and missing of social responsibility. It puts forward that improving and perfecting the financial regulatory system and enhancing the social responsibility of market participants are of great urgency.The fourth part gives a introduction of the development of asset securitization in China. Based on the reflection of asset securitization of the above two parts, it examines Chinese asset securitization, affirms what has been achieved, points out the existing lack and proposes pertinent recommendations on promoting asset securitization again.