Research On Non-performing Loan Securitization Of Chinese Commercial Banks

To deal with large scale of non-performing loans is a very important issue facing all countries. The large scale and growing non-performing loan and the pending open-up of finance sector to the world compel Chinese commercial banks to take full advantage of their own ability to solve the problem of non-performing loan. In the early 1970S,securitization was principally an American financing technique. Now the measures that commercial banks and asset management companies take cannot meet the need of dealing with large scale of non-performing loans. So to find the best way of dealing is a big issue for the existence and development of commercial banks. Non-performing loan securitization has significant role in ensuring the stable development of our finance industry. Non-performing loan securitization can decentralization, reduce the risk of our commercial banks, improve the capital structure, increase capital adequacy, asset liquidity and advance the competitiveness of our banking industry.First, this paper introduces the relative concept of securitization, its characteristics and terms of use, the core and basic principles, the mechanism of securitization. Then, it uses and compares the foreign experiences for reference, and combines Dongyuan2006-1 NPL ABS to analysis the weakness, and threats that we face with in the securitization of non-performing loan of Chinese commercial banks. Last but not least, it makes some suggestions on the design of model and transaction structure for the development of securitization. At present, Adopting the trust model of SPV in securitization is the realistic choice of non-performing loan securitization of Chinese commercial banks. And to promote the development of the non-performing loan securitization of Chinese commercial banks, related legislation and regulation work should be made.