A Research On The Financial Effects Of Securitization

In March of 2005, the credit securitization pilot project has been formally started in China, China Development Bank and China Construction Bank carried on the pilot projects of credit securitization and housing mortgage securitization respectively as the pilot units, which have raised the curtain for our country's native securitization formally. UNICOM and Guan-Shen Expressway are listed in the system of large transaction in Shenzhen Stock Exchange and Shanghai Stock Exchange in the second half of 2005 and the end of 2005 too. So far, securitization have got more overall development at home, also marked the emergence of a new channel for direct financing of enterprises in Chinese capital market.Next, more enterprises will launch various types of securitization products; the scale is up to one hundred billion. In the securitization birthplace of the United States, it has become one of the most important financing tools in the capital market. As of the end of 2004 the balance of securitization products has reached 7.3 trillion dollars, the market size of more than U.S. government bonds market (3.9 trillion dollars) and the United States federal agencies bonds market (2.7 trillion dollars). Since securitization products have been so favored by enterprises and developed rapidly, it is inseparable with its contents and the financial effect is to bring to enterprises.The reorganization of the risk and return elements are the key that securitization provide new mobility sources to capital markets. A new securities embodied in the risk-return relationship must be met the risk-return rate of the issuing market expected, and securitization can achieve this goal through the reorganization of risk and return of asset, so that the assets can realized the mobility in the market risk-return rate, and effectively decrease the cost of financing. Currently, according to two respects of practice and policy, our securitization are in just the beginning stages, in order to effectively promote the application of new financing tool for our enterprises, and further open up markets financing channels and improve the capacity of survival and development, so is essential for us to study the enterprise financial effects of securitization deeply...