The Research On The Motivation Of Commercial Bank's Credit Asset Securitization In China

Asset Securitization is regarded as one of the most important innovations in the area of international finance since the 1970s. Both in macro or micro level, it plays an enormous role. In macro level, it optimizes the allocation of resources and improves financial efficiency. In micro level, it can help commercial banks improve capital structure, and can also contribute to the diversification of investors. In the bond financing of developed countries, the development of securitization is quite mature, and the scale of asset securitization bond financing have already surpassed the scale of corporate bonds. However, the securitization of developed countries inevitably has some problems, making the actual effect of securitization has deviation from initial motivation of issuers. These problems have led to financial crisis such as the subordinated debt crisis, and have caused loss to the world's financial industry. As a developing country, China needs to draw on the experience of developed countries in financial innovations, learn from the lessons of developed countries and continuously develop asset securitization. At present, China's capital market has many imperfections in the system, such as ineffective monitoring deficiencies, which restricts the development of securitization. We should pay attention to the issue of how to learn from the way of foreign countries'asset securitization development to solve the difficulties faced.By researching on the theoretical motivation and our country's actual motivation of credit asset securitization product issued by commercial banks, we make comparative analysis with the aim to identify the reason for the deviation from theoretical motivation to our actual motivation, and provide theoretical support for securitization practice. The article is divided into five parts.The first part is introduction. The research background is initially introduced, that is, the theoretical and practical significance of research. It is pointed out that as a financial tool asset securitization has brought many benefits, but due to the diversity and risk of financial instruments, it is still necessary to conduct in-depth studies to enable them to play a better role in financing and regulation. At the same time, domestic securitization market is still in an early stage, and the related theoretical research rarely has in-depth study, which also increased the necessity for research. In addition, domestic and foreign literatures are reviewed by the published sequence.The second part is asset securitization concepts and basic theory. This part firstly introduces some research on the concept and different definitions of asset securitization. Secondly, we introduced the three basic principles of securitization, namely the reorganization of assets, risk isolation and credit enhancement principle. As the foundation of asset securitization product operation, these three principles are in a key position in the entire securities process. Thirdly, we introduced the stakeholders in securitization process, so as to provide basis for the discussion from different stakeholders'perspective.The third part theoretically analyzes the motivation of commercial bank credit asset securitization. Initially, we analyze the macro cause of securitization. From the aspect of technology, market and government, we analyzed the role of environment played to securitization. Following part is based on the issuer, namely, the banks'perspective, discussing from the micro aspect that why the commercial banks implement securitization. Based on the analysis of material, it is concluded that the implementation of securitization by commercial banks is mainly to meet the capital adequacy ratio requirements proposed by Basel Accord, at the same time to improve the liquidity of banks'capital funds and solve the problem of capital mismatch, further more, to reduce the cost and risk of operating capital. Next part is from investor's perspective. It is found that the characteristic of securitization such as credit enhancement could limit the risk of investor, so it could be more attractive.Part four mainly discusses the actual motivation of securitization, as the comparison to the theoretical motivation discussed above. Different from foreign theory, the external cause of our country such as market environment has not been formed yet. From the perspective of issuer, the divided operation of finance can not bring the comparative advantages. The pressure of supervision could not form the motivation. State-owned large bank would not impose securitization with the aim to improve financial status. Therefore, all the theoretical above can not be seen in China. However, banks are faced with relatively high level of risk. Moreover, the effectiveness of market is quite week, and many cost items such as agency cost are very high. So if banks realize the function of securitization on these aspects, these will become the motivation of banks to securitize their assets. From the perspective of investors, they are lack of understanding to asset-backed securities. Although asset-backed securities are worthy of investing, the incentive of investors still can not be the motivation of securitization.The fifth part summarized the above conclusions and discussed the origin of some certain lacking motivation, such as banks'capital is overflowing and lack of financing incentive; the main motivation of Chinese banks is digesting their nonperforming loans; monopoly by state-owned large banks weakened the creativeness; there is still no marketization of interest rate, causing difficulty of the pricing of securitization. Based on a clear understanding of the main difficulties we propose necessary countermeasures need to take.