Banking Bad Credit Assets, Asset Securitization Law Analysis Of Latitude

The banks’ non-performing assets mean the part of bank credit assets formed frombanks granting loans, which do not meet the safety, liquidity, and the benefit principlerequirements and are in overdue, suspended, doubtful states with risk of default. Thenon-performing assets have been a major problem facing China’s financial industry. Afteryears of banking industry reform, traditional methods still cannot resolve non-performingassets effectively. Banking and financial sectors began to solve the problem by combiningbank non-performing assets with securities markets with innovative financial instruments.Asset securitization is a financial innovation in the1970s, it is also said to be the mostimportant financial innovations since then. It is a comparatively complex and sophisticatedlegal design, with assets as the basis of credit. It is in the form of securities in accordancewith the principle of trust law, and generally has dual properties of both trust beneficiarycertificates and securities. Innovations of financial instruments of any kind requirecorresponding legal support. China has yet no special legislation on asset securitization. Soasset securitization program must proceed from existing laws, based on reality andundergone steady exploration. The purpose of this article lies here: with the operationalexperience of non-performing assets securitization, to explore the issues related to China’sbank non-performing assets from a legal perspective, such as the security law and thebanking law; to raise the writer’s ideas about the solution of non-performing assets, so asto put knowledge into use.