| Asset securitisation was innovated in American real estate mortgage market in 1970s. Nowadays it has been applied in more and more kinds of financial assets including automobile selling mortgages, charter hire, copyright patent fee, credit card receivable, life insurance bill, industrial and commercial loans, etc. As one of the greatest innovations in finance in the last twenty years, securitisation has made significant impact on the whole financial market and intermediate institutions such as commercial banks. Asset securitisation refers to the investment process through which a commercial bank transforms mortgages into securities. The commercial bank sells some asset pools which are composed of mortgages to a professional institution — Special Purpose Vehicle (SPV). Then the SPV issues the asset-backed securities guaranteed by the asset pools. The asset-backed securities are sold to the investors. Why is securitisation used so rapidly and extensively in international finance field since it's introduction? The answer lies in the distinctive functions of securitisation. First, through securitisation, loans can be changed into liquid securities, so securitisation can raise the liquidity of balance sheet. Second, it can improve banks' asset quality, extend source of fund, disperse risk of credit, lighten pressure of capital adequacy and enhance safety of finance system. Now we are developing national economy and reforming economic & finance system to construct socialist market economy. Securitisation is very helpful for our country to solve many difficult economic and finance problems. At the same time, the application requires pre-conditions and environments.This paper includes five chapters. The first chapter generally discusses securitisation. Firstly, the conception of securitisation is interpreted. It means the commercial bank puts together asset pool lack of fluidity but will incur cash flow in future, then reconstructs its cash flow and sells asset pool to SPV. SPV then issues securities backed by asset pool in public market. Secutitisation includes primary and secondary securitisation. This paper only discusses the secondary. Then, it analyses intention of securitisation innovation and its influence on financial market. The basic intention of securitisation is to make asset of commercial bank more fluent and creates a new income source, helps bank acquire finance of less cost and higher asset quality and induces taxes. In addition, commercial banks also use securitisation to deal with the competition of stock market, change of market interest rate, etc. The development of technology makes this innovation reasonable. The securitisation will deeply affect the whole financial market and financial intermediary institution like commercial bank.The second chapter mostly discusses the basic theory of credit asset securitisation. This chapter is also one of the most important chapter of this paper. The first section analyses two classes of credit asset quality by using Karl Marx's theory on credit capital's movement law, and comes to a conclusion. This conclusion includes contents below: first, the situation of loaner's producing and management directly effect the quality of credit asset, accordingly the loan may be divided into two classes — high quality loan and low quality loan. Second, the concrete form of loan's future cash flow is different because of different loan agreement and different sensitivity to different market risk. In the second section analyses the purpose of securitisation of high quality and low quality loan and describe the character of loans suit to be securitilized.The third chapter is the longest chapter of this paper, which is written due to different subject. Its contents involve the general process of credit asset securitisation, cash flow guarantee of securitisation, the variety of mortgage-backed securities and credit enhancement of issuing securities. The masterstroke of this chapter is how to improve credence rank of securities through designing security... |
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