Research On Mortgage-Backed Securitization

The mortgage-backed securitization whose origin was USA is logically one kind of structural financing means, which make it possible to invest the housing mortgage market from the capital market and improve the liquidity of the mortgage loans in commercial banks. As the one of the most important innervations in 1970s, the mortgage-backed securitization could play its role by optimizing and enlarging such market capability. Furthermore, such financing can secure the liquidity of banks and disperse the risk as well. Recently, the global capital market have received acute fluctuation from the subprime lending crisis in USA, which demonstrates the mortgage-backed securitization can magnify the risk in capital market besides its efficient performance in improving the liquidity structure of banks. Currently, our nation is processing the mortgage-backed securitization step by step. It proves to be necessary to learn the lesson of USA which focuses on the benefit from such securitization more than the risk alarm potentially. On the other side of the coin, we can neither throw away the apple because of the core, for the improvement of bank core competencies is our intensive concern significantly. Besides above, the author lists the example of Japanese financial foam in 1990s, along with the case of subprime lending crisis in USA, to illustrate the danger of the mortgage-backed securitization in performance either from the rash side or the conservative aspect respectively.Taking the viewpoint of domestic situations, I am supposed to illustrate and explain the risks in the mortgage-backed securitization products by exemplifying the mortgage-backed securitization product"JianYuan"from China Construction Bank. By using quantitative and qualitative means, I suggest the resolutions to the extent of micro aspect as well as the macro one which can settle the problems in the mortgage-backed securitization process by analyzing the system of laws, financial surroundings, state policies and pricing mechanism in such securitization.