Research On Risk Management Of Mortgage Backed Securities In China

Mortgage Backed Securities (MBS) is a novel structure of the mode of financing. Because this kind of financial innovation has various superiorities, it is extremely rapid in the various countries development. On March 21, 2005, approved by the State Council, credit asset securitization pilot officially has been started, China Construction Bank for housing mortgage loan securitization business pilot, and December 15, 2005. In the inter-bank bond market will be issued to the public "Jianyuan 2005-1 personal housing mortgage loan securitization trust assets priority support holders of the securities". Mortgage-Backed Securities is to improve our domestic financial markets is an important way is alleviating the current domestic commercial banks will soon face a liquidity risk and to raise the capital adequacy ratio of effective means.However, Mortgage-Backed Securities as a financial derivative in hedge risks at the same time, there is also associated with other non - eliminate risks. Meanwhile, the housing mortgage securities, involves the debtor, sponsors, housing mortgage loan securitization, specialized agencies (SPV), credit enhancement institutions, trustees, investors and other parties. This makes housing mortgage loan securitization of risk showing continuity and complexity. Controlling of the risks becomes very difficult. Any related problems may affect the financial system stability, thus affecting the failure or successful of housing mortgage loan securitization. Therefore, it would be very necessary to predict the potential risks according to the reality of China's economic environment. Based on the discussion of the potential risks of China's MBS, this text constructs a housing mortgage loan secuntization risk prevention mechanism system so that promoting the development of our country's housing mortgage loan negotiable securities smoothly.The full text is divided into five parts to carry on the elaboration:The first part introduces the background of the research, theoretical study of the synthesis about MBS and the risk management of MBS both in foreign country and in China and the purpose and concept of this text.The second part mainly explains the housing mortgage loan securitization of risk theory. This chapter firstly expounded on the financial derivatives risk-formation theory, in order to illustrate basic theory of the housing mortgage loan securitization risk. Then, the paper introduces the MBS's development and risks of MBS in the U.S.A, as an example for China to learn.The third part forecasts the potential risks of China's development of MBS according to China's current economic environment. To start, the paper introduces the "Jianyuan 2005-1 Mortgage Backed Securities Trust assets priority support certification coupons" of China Construction Bank for the foundation. Then the paper analyzes the current development of China's housing mortgage loan securitization of the status and characteristics. Finally, on this basis, the paper further predicted the potential risks of MBS: risks of the asset quality of the pool, risks during the MBS operation process, inflation risks, legal risks and regulations policy risks.Based on the previous forecast and research of the risks of China's MBS, the fourth part analyze the formation of these risk factors in-depth. Five aspects were discussed, including: formation of prepayment risk; Commercial banks stringent internal control mechanisms; accounting and tax system is flawed; security and insurance system is flawed; personal credit system is not perfect and the level of technical and personnel constraints. The fifth part constructs the housing mortgage loan securitization prevention mechanism based on the previous chapters' discussion of the MBS's risks. Firstly, this chapter gives some suggestions about risk prevention polices from two main aspects which are the external environment and the participators of MBS market. Together with China's housing mortgage securities risks prevention regulations, the text constructs a MBS risk management system according to China's current situation.