Case Analysis On The Asset-backed Securitization Of Commercial Bank

Asset backed securitization is one of the most important and fastest developed financial innovation business in international financial field since 1970's. In a securitization, a company partly"deconstructs"itself by separating certain types of highly liquid assets from the risk generally associated with the company. The company then can use these assets to raise funds in the capital markets at a lower cost than if the company, with its associated risks, had raised the funds directly by issuing debt or equity. The company retains the savings generated by these lower costs, while investor in the securitized assets benefits by holding investments with lower risk.The ABS of the commercial bank is an important part of the ABS market. ABS has been introduced to China for over ten years. In Dec. 15th, 2005,China Development Bank and China Construction Bank issued Kaiyuan and Jianyuan security respectively, which is a symbol of the beginning of Chinese bank's ABS.This essay analyzes the security Kaiyuan 05-1A to demonstrate how to ensure the development of Chinese bank's ABS. At the end of the essay, some suggestions to apply the ABS to China's banking industry are put forward. The essay consists of five chapters. First, the essay gives the definition of the ABS on the basis of the former research, describes the basic theory of ABS, classifies it from deferent angles and introduces the basic principle, procedure and the risks.Then the essay sums up the history of ABS, including its origin, the development in other countries. Analysis was given on the development, present status, obstacles of ABS in our country, and the possibility of non-performing loans backed securitization is described.To testify the point of view, the essay introduces the basic information of the Kaiyuan 05-1A, which the first ABS of Chinese bank, and analyzes the price-fix and the characteristic of the Kaiyuan 05-1A, in order to summarize the reason of the successful issuance and the slack bargain.At last, on the base of the former, the essay concludes the essential ingredients of development of the Chinese ABS, and gives some proposals to the ABS market.