Analyzing The Betterment Of MBS On Credit Structure Of China's Capital Market

ABS as is structural financing is the trend of financial development in future. Mortgage has many advantages to be securitized. The effect of MBS in China is more than that in advanced countries. Owing to the development of China's capital market accompanying reform of state-owned enterprises, the intention of its initiation is not to allot resource but to finance for state-owned enterprises.To make things worse, the entrust and agency mechanism of state-owned enterprises makes the obligor free of obligations and the state the obligor, thus the credit structure of capital market is malformation: state credit is dominant,enterprise credit is slim and individual credit is null. This condition malfunctions resource allotment of capital market. Among all the options, MBS is the most feasible at present. Besides the acceleration of developing real estate. MBS can consolidate micro-credit and better credit structure of capital market. Consequently, promotion of MBS is the star and goal of our policy.As one of the major parts of 21st Century financial structure modulation and the innovation of financial instruments worldwide, housing MBS manifests that the economy of one country has arrived at a higher stage. With the increasingly expansion of Chinese real estate market, it's imperative to speed up the implementation of housing MBS and development of second board market therefore. As one of the top quality assets possessed by Chinese banking sector, housing mortgage loan gives rise to the reform of traditional operation mode in commercial banks. The housing MBS is to be the bright spot for financial innovation in China because of its low investment risks and higher income rate than that of the national debt. Therefore, the insiders regarded it as a new investment mode, which could be completely adopted by Chinese investors. To some extent, the housing MBS is helpful to the improvement of one-sided structure in Chinese money market and fund raising. So, acceleration of MBS development shall be the jump-off point and goal to be achieved as we make out the short-term strategy.