Research On The Risk Management Of Credit Asset Securitization In Commercial Banks

Asset securitization is one of the most important innovations in recent decades. It can turn banks'assets of illiquidity into bonds that can be sold and distributed in the financial market in order to financing by clever design. As an innovative financial instruments, asset securitization brings some benefit to the financial market. However, it is also accompanied by a series of risks as the traditional financial instruments do. The outburst of subprime crisis serves as a wake-up call to China's commercial bank credit asset securitization. Therefore, identifying the risk accurately and performing effective management is the key to develop asset securitization.There are many entities involved with the process of credit asset securitization. They are exposed to some risks including the risk coming from the underlying asset quality as well as the securitization structure. Therefore, the risk of credit asset securitization manifests itself in the characteristics of continuity and complexity. Since starting the experiments on the credit asset securitization in 2005, China has been accelerating the pace of the financial innovation. Especially in the face of the influx of foreign banks and financial openness, commercial banks begin to enhance their core competence by using the asset securitization. However, asset securitization started late in China. And the development is not mature. Therefore, there are considerable risks in the process of credit asset securitization. On the basis of theoretical study, this thesis identified and evaluated the risks systematically in the process of commercial bank asset securitization by adopting a combination method of inductive and deductive, qualitative analysis and quantitative analysis, theoretical research and practical application.The thesis was divided into five chapters. The first chapter mainly introduced the background and the significance of topic selection and the status quo at domestic and abroad, as well as the main innovation. The second chapter introduced the theory of commercial bank asset securitization and set a stage for the study and analysis towards this problem. The third chapter explained the causes of credit asset securitization risks in commercial banks from a theoretical point at first. Then the chapter described the risks in the process of credit asset securitization, and in particular analyzed the most important risk-credit risk. The fourth chapter proposed countermeasures to manipulate the risk existing in the process of asset securitization and emphasized the management of credit risk from the angle of product design. Then the chapter studied the risk of mortgage securitization issued by China Construction Bank as a case. The fifth chapter analyzed the status quo and the problem of China's commercial bank asset securitization. Then the chapter gave some suggestions in order to further develop our country's credit asset securitization.