The Study On The Credit Risk Management For Financial Assets Securitization In Taiwan

Taiwan(China) has entered a brand new pattern of capital market since "Regulation of Securitization of Financial Assets"was regulated in June,2002. Owing to the broadly extensive and structurally complicated aspects involved with securitization of financial assets,the success of securitized goods depend on a crucial factor - credit risk management.During the process of financial securitization,the initial agency clusters its standardized and asset-pool and sell them to a certain medium agency.The latter intrusts its bonds to credit rating organizations to evaluate the risks for investors to understand the credit risks of the issued bonds.Moreover, excellent credit rating not only increases attraction of the bonds to investors but also decrease assisting costs so that the issuing agency takes a varity of credit enhancement measures,expecting to bring down the credit risks and attain higher creditability.This research presented here explores the related topics of credit risk management in securitized financial assets and further analyzes the importance of risk management,credit rating and credit enhancement.Mutual proof can be achieved theoretically and practically through wholly conceptual case study derived from the securitized financial goods.The findings indicate,after case analysis,the varying span of expected risks falls on a large range;Secondly,the mechanism, which has utilized risk diversifying,is qualified with sound entrusting policy and perfect risk management.In addition,the beneficiay bonds are evaluated fair,both the initial agency and rating organizations are qualified as well.However,because of lacks in referent contract breach in our domestic credt rating agency,the objectivity of investment reference shall be restricted.The second placed beneficiary bonds and preparatory funds used in this case are considered as inside credit enhancement tools, not outside ones.The domestic market is so deficient in credit enhancement agency and experience during the process of securitization that the effect of lessening risks might be limited.This search is defined as a benchmarking case positively and provides a reference for the administration offered in this markets,and investors to consult.Finally,the suggestions offered in this study can be valuable reference to domestic financial development of securitized financial assets.