Obstacles And Countermeasures Of Bad Financial Assets Securitization In China

Capital securitisation is a kind of behavior which can transform the capital held byfinancial organizations or other enterprises, lacking fluidity but can produce theforeseeable and stable cash flow, to the securities that can be sold and circulated in thefinancial market, guaranteed by the original capital, through certain structurearrangement and reorganization of the risks and proceeds. Capital securitisation, anew sparkle in world financial renovation since 1970s, was originally used torevitalize the bank capital that is short of fluidity and then played an important role indisposing the non-performing loans. It is regarded as the best way to resolve thenon-performing loans because it can move the credit capital in Bank Balance Sheetfrom in-sheet to out-sheet so as to improve the fluidity and profit of the capital in thebank. It is true that in our banking system there exists abundant non-performingcapital. These non-performing creditor's rights are caused by some deeper historicand systemic reason. How to resolve and dispose these non-performing creditor'srights has aroused Chinese government and scholars' close attention. Drawing on thesuccessful experience of international capital securitisation, using of the capitalsecuritisation system to resolve the bank's non-performing capital is the importantproblem faced by capital companies and commercial banks. It is very important,starting from our country's facts, to further discuss the non-performing capitalsecuritisation in accordance with Chinese features so as to greatly quicken thecultivation of our country's non-performing capital market system and the innovationof the financial products and realize the blend and interface of Chinese finance andinternational finance. The article places the emphasis on the discussion andsummarization of the difficulties and their countermeasures of the non-performingcapital securitisation carried in our country.