The Development Of China's Residential Mortgage-backed Securitization And The Revelation From The International Experience

Asset Securitization which started in Residential Mortgage-backed Securitization,is one of the most important financial derivatives in the recent 30 years.It has been widely and maturely used in the United States and other developed countries.Our country also started the exploration of Residential Mortgage-backed Security in the early 1990's. In 2005,China Construction Bank successfully issued the first mortgage-backed security, which also marked China started a comprehensive asset securitization.Its issue size reached 3.017 billion.Promoting Residential Mortgage-backed Securitization in China is of Residential Mortgage-backed Securitization for the capital markets, commercial banks, corporations and financial markets. Residential Mortgage-backed Securitization in China has accumulated some useful experience and achieved much success.But there is still several problems, such as the legal system related is imperfect, capital market is immature,the Mortgage loans are of great credit risk, the lack of authoritative rating agencies and financial supervision.Compared to the U.S.,China has high quality mortgage loans. However, there is a conspicuous problem that prepayment risk is at a high level.In response to this risk, there will be empirical analysis of this prepayment risk factor in this paper.As the largest Promoting Residential Mortgage-backed Security market in the world,America's securitization is very experienced.Hong Kong' Residential Mortgage-backed Securitization started late compared to the developed countries, but its development was very successful.Further more, the situation in Hong Kong is closer to China Mainland.In the new era after the financial crisis, fully study and draw development experiences and lessons in the two regional has a valuable reference for the development of Residential Mortgage-backed Securitization in China.Although the sub-prime crisis has had serious consequences for the world,as a financial innovation tool,the Residential Mortgage-backed Securitization itself is not wrong.As long as it can be properly used and effectively control the risks,it is still able to broaden the investment channels of capital markets,improve asset liquidity, strengthen risk control capacity and profitability of financial institutions.From international experience,the financial crisis is a great challenge but also opportunities for the development of residential Mortgage-backed securitization.It can make us treat its advantage and weakness more comprehensively, so that we are able to take corresponding measures to better prevent risks.Therefore,this paper focuses on this point, analyze the development characteristics and problems of Residential Mortgage-backed securitization.In the end,from other countries' experience,as well as our China's national conditions,the corresponding policy recommendations will be made.