China's Commercial Banks Non-performing Assets Securitization Feasibility Analysis

The large amount of non-performing assets existing in commercial banks hasbecome one of the largest obstacles to China's financial reform. Non-performingassets have negative impacts on the development of China's economy as well asthe security of its financial system. Asset securitization, as one of theeffective financial tools in dealing with the non-performing assets, hasattracted more and more attention from the government and commercial banks. Butits application to non-performing assets requires an advanced economic situationand market system. Whether it is applicable to China or not is a controversialfocus in the academic circle. According to the basic principle of asset securitization and based on thehistorical data of Chinese commercial banks, this paper attempts to prove thefeasibility of this measure from capital reorganization, risk segregation andcredit enhancement respectively. Focus on the selection technology, this paperemploys the mathematical method to analyze the feasibility of the process inselecting the suitable non-performing assets for securitization. And then thepositive aspect of the current economic environment and successful experiencesare given a detailed treatment, which intends to further strengthen thestandpoint of this paper. The whole study is concluded by suggesting someeffective measures to solve the difficulties in the application of the assetsecuritization to non-performing assets.