China To Carry Out The Mode Of Operation And Policy Design, Asset Securitization

Asset Securitization is one of the most important financial innovations since 20 century 70 decades. It transfers the asset that is lack of liquidity into liquid securities through structuring a series of trades in order to obtain capital and improve the structure of assets and liabilities. After 30 years developing, Asset Securitization has become one of the most important financial means.At present, our capital market is not able to meet with the need of economic development, so that many high quality items don't launch because of capital shortage. At the same time, because of economic system, bank has undertaken many government functions that had resulted in a large number of bad assets. From Asset Securitization view, this paper puts forward the projects and policies to solve the problems.Mortgage is developing fast in China. Therefore, due to supply sufficient capital for mortgage, bank must find new capital medium. Mortgage Securitization is helpful to dredge the canal of housing finance, to improve liquidity and increase adequatance for domestic banks, to activate financial innovation and perfect financial infrastructure. In the course of Securitization, it is necessary to set up a Special Purpose Company which is government-based and issue CMO(Collateral Mortgage Obligations). In the meanwhile, government should give preferential polities and supports in laws, such as Accounting, Taxation and so on.How to dispose bad asset transferred from commercial bank is a puzzle to financial management companies. This paper raises the project: financial management companies choose partner that is specialized in disposing asset to form a limited company as SPY which issues asset securities based on bad asset that have good collaterals. Through this course, commercial bank will obtain continuous capital support.Due to many limitations in economic environment and laws, there are many obstacles to develop Asset Securitization in China. In order to solve the problems, this paper discusses the realistic importance of cross-boarder Asset Securitization and designs the program and relevant policies. Now, there are a few successful cases of cross-broader Asset Securitization, this paper selects Zhuhai Highway Securitization and Assets ?Backed Commercial Paper of CIMC to analyze and explain the importance for our country to develop Asset Securitizaion in the future.