The Securitization Of Housing Mortgage Loans To Promote The Efficiency Of Financial Market Structure Analysis

In recent years, the price of real estate in China is rising high,resulting in some bubbles in the market. Moreover, the money used forbuying house mainly comes from banks' loans, which have brought hugefinancial risks. In such circumstances, mortgage-backed security wasissued in China for the first time. Based on the financial developmenttheory, this paper examines the function of mortgage-backedsecuritization (MBS) in optimize the structure of China's financial system.Financial development includes both financial growth and diversification.Depending on data availability, financial interrelations ratio (FIR) iscalculated to reflect the single structure of China's financial market. Thenin the aspects of economics theory and real market, the thesis explains theinner structure advantage of MBS. Finally, the conclusion is that theintroduction of MBS will enhance banks' liquidity, maintain banks'capability of granting house mortgage loan, diversify the structure offinancial market and improve the efficiency of financial system.Therefore, MBS is an effective measure to control financial risks,as wellas the drive power of financial diversification.