Study On The Patterns And Pricing Of Non-performing Loans Securitization In Stated Owned Commercial Banks Of China

Since a long time, the focus on Non-Performing Loans(NPLs) from both official authorities and research area of China is based on two important reasons:first, the huge amount of NPLs; second, the close relationship between NPLs and the development of State-Owned Enterprises(SOEs).The series problem of SOEs'"soft loans"(lending based on Non-Marketization Agreement, like political network) is one of the major indicators. Meanwhile, the supervision on these loans is showed being less effective and the efficiency of investment from the SOEs mentioned above is less competitive than those who don't get access to these "soft loans". This inappropriate allocation of scarce resources will finally lead to negative improvement of the economy efficiency and quality. According to a research of People's Bank Of China in 2003,30% of NPLs in State-Owned Banks(SOBs) is because of government intervention,30% is owing to mandatory credit support to SOEs, 10% is for less complete legal norm and enforcement guarantee,10% is due to some SOEs' restructuring, last 20% is from SOBs operation decisions. Exposing to such serious threat of NPLs, from the experiences of both home and abroad, securitization is one of the effective ways to liquidate NPLs and disperse the risk triggered by it.Regarding NPLs' securitization, this paper mainly focus on two points:patterns for this operation and pricing of Asset-Backed Securities, with discussion restricted to SOBs. The 1st chapter discusses research background and status for these two topics; The 2nd chapter details the situation of NPLs in SOBs and introduces the resolution actions for this problem home and abroad; The 3rd chapter is dedicated to the theory of securitization and patterns for SOBs' NPLs securitization. The 4th chapter based on the pricing theory discusses the pricing for Asset-Backed Securities from two dimensions and finally gives the conclusion of the whole discussion.