The Study On CDO As A Tool For Assets And Liabilities Management Of Commercial Banks

Assets and liabilities management is an important job concerned by both domestic commercial banks and supervisors. A good environment for mechanism, conception and innovation is needed for improving the assets and liabilities management. Collateralized debt obligation(CDO), which is the combination of credit derivatives and asset backed Securitization, has become a key component of the financial products since 2000. There are few literatures specialized in CDO, and domestic banking seldom has the chances to be involved in this kind of financial products. This article shows the improving importance of the CDO in the ABS markets, and introduces the characteristics and parties of CDO. This article also tries to categorize CDO and analyze the reason of the rapid growth of CDO, which reveal the latest trend of ABS. With a case, this article analyzes the mechanism of assets and liabilities management of commercial banks using CDO, and outlines the positive and negative factors for domestic introduction of CDO as a tool of assets and liabilities management of commercial banks.Adopting the theoretical and case analyses measures, there were 5 chapters in the article as follows:Chapter 1 introduces the assets and liabilities management and the improving importance of CDO in the ABS markets.Chapter 2 par introduces the characteristics, classification and parties of CDO.Chapter 3 part analyzes the risk and return of CDO.Chapter 4 part analyzes a case of synthetic CDO.Chapter 5 is the study of introducing the CDO to domestic financial market.