| Mortgage Backed Securization (MBS) is one of the most important financial innovations during the past thirty years. The introduction of mortgage-backed securities can boost economic growth, efficiently utilizing the present resources from macro perspective. Additionally, mortgage-backed securization can help commercial banks get rid of the problems caused by the incompatibility of their assets and liability. And from micro perspective, it can improve the ratio of their capital adequacy and increase their capital mobility, avoiding potential risks of the long-term loans. In addition to that, the financial innovation also connects direct financing with indirect financing, speeding up capital movement between them. MBS also accounts for a large percentage of asset securization which exerts a profound influence on the financial market where participants find more opportunities to do their work that fits them best. This in turn will greatly increase the efficiency of the whole market. Because of these positive effects, our country plans to develop MBS in China.The article mainly focuses on introducing MBS and opening the second mortgage market in China. It demonstrates the origin and development of MBS and sums up the experience of MBS in the world. Then the article generalizes the basic principles of MBS. Finally it analyzes the future of MBS in China. Through the analysis both of present relationship between the security supply and demand and of the relevant factors of system, the author believes though there are some factors affecting the future of MBS in China, the phasing in of MBS by the off balance sheet is the inevitable trend, with MBS by the balance sheet on the first stage. |
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