The Enlightment That Sub-Prime Credit Crisis Brings To The Risk Control Of China's Mortgage-backed Securities

As a financial derivative instrument, Sub-loan securitization depends its complex design process on bringing the benefits to the participants, such as: providing the sustained housing loans on the borrowers, transferring the risk from the loan companies, offering an assessment of income to Rating agencies, Providing investors with a new investment instrument and so on. The last few years Sub-loan products yield unusually brilliant in the American stock market, not a few nations expand Sub-loan products product in succession. As a result Sub-loans in the proportion of mortgage loans and Sub-loan securities in the proportion of the stock market at a rapid increase, Inherent risk is more and more. The outbreak of the sub-prime crisis, making people who dream of getting rich awakened, people can not help asking why.In recent years, with the rise of China's macroeconomic, financial markets continued to be refined, the housing loan market also continuously strong. But compared with developed countries, the share of China's housing loan market is too low, can not satisfy people's demand for housing loans and housing loans exist a great shortages at risk management, such as: too much focus on the risks of banks, lacking other lending institutions and so on. Through loan securitization, the problem of insufficient funds and risk concentration at banks can be solved so that securitization of housing loans has a strong practicality in theory. In this article, combined with the status of China's housing loans and sub-loan crisis warning, there is an important guiding significance for our country on how to effectively control the risk.The body of this article is divided into three chapters:ChapterⅠis the risk of mortgage-backed securities and the accumulation of sub-loan risk in the middle of the loan crisis. This chapter is divided into two parts, the first part introduced the risk in traditional mortgage-backed securities program; the second part introduced the sub-loan crisis in the accumulation of sub-loan risk, conducting a deep analysis from the government's monetary policy, the excess global liquidity, borrowers, lenders, rating agencies, brokers and portfolio investors behavior, and revealing the necessity of the outbreak of the sub-prime crisis.ChapterⅡis the potential risks in Chinese mortgage-backed Securitization market. This chapter is divided into two parts; the first part introduced the risk of Chinese mortgage, in actual life, bank lending with so much caution, there is repeated discussions between the risk assessment and the personal loan department for just a loan. But facing a large number of borrowers who deceive themselves , even encourage others people for loans, there is still a large number of unqualified borrowers to obtain loans, which accumulates a great deal of risk in our housing loans. The second part introduces the potential risks in Chinese mortgage-backed Securitization market, such as: inadequate laws and regulations,lack of expertise and so on.ChapterⅢis the inspiration of the sub-prime crisis on China's housing loan securitization risk control. This chapter is divided into three parts; the first part combines of sub-loan crisis, stressing the importance of financial supervision, controlling the scale of financial innovation, guarantying the capital adequacy ratio of banks. The second part presents the inadequacy of our country's financial markets and institutional deficiencies, pointing out that China's financial institutions should increase the type and scale, and setting up the individuals,companies credit system. The third part introduced our securities investors. China's bond market is not fully open to individual investors, especially mortgage-backed securities are prohibited from entering while individual investors lack ability which determines that it is difficult for our country to be a mature,breadth and depth capital markets.