Study On The Effect Of China Commercial Bank's Capital Adequacy Ratio By Asset Securitization

Asset securitization is a process of pooling various categories of assets and creating securities that derive their value from the asset pool and income streams derived therefrom. Asset securitization is one of the most important and vigorous innovations on the financial market ever since 1930s. To commercial bank, asset securitization has the function of improving commercial bank's capital adequacy ratio.The essay first introduces what are asset Securities, focused on how much degree asset securitization can improve bank's capital adequacy ratio. Firstly this essay studies how to make a good use of securitization by the choice of securitized asset.In terms of differert character of securitized asset, fine loan-backed securitization prefers to non-performing loans securitization. In terms of different kind of asset, risk rated ratio is bigger, the effect on capital adequacy ratio is bigger.Secondly, it introduces asset securitization framework in the "New Basel Capital Accord" and the implications on the improvement of capital adequacy ratio. And the essay analyzes the China construction bank's MBS reacts on construction bank's improving of capital adequacy ratio. By research, we find that supervision over asset securitization by "New Basel Capital Accord" weakens the effect that asset securitization have on commercial bank's capital adequacy ratio.Lastly, upon above analysis, suggests are given in the essay.