Study About Legal Supervision On The Risks Of Asset Securitization

As a new financing tool, asset securitization is widely used around the world financial market. The advantages of increasing asset liquidity and off-balance-sheet financing of asset securitization satisfy cash flow requirements of the financial market and drive the development of the whole financial market. Asset securitization first rose up in the U.S. financial markets and played a great role in saving the American economy and the early out of "sluggish" state and making it out of "sluggish" state early. Therefore, asset securitization was widely promoted by the various countries government. However, application without restraint of asset securitization technology made the virtual economy excessive inflation and the entity economy breaking the pale, eventually cause the sub-prime crisis. Furthermore, the sub-prime crisis became the economic crisis sweeping the globe. Based on the background, this paper takes the evolution of the legal supervision mechanism of asset securitization as the center and summarizes the experience for reference so as to promote the development of the system of legal supervision of Chinese asset securitization.First, Chapter one will be introducing the basic concepts of asset securitization and its Operation mechanism.Second, this paper will be introducing the risk of arising from asset securitization and its regulatory theory in detail and clearing the necessity of research on American asset securitization supervision system in the end. Chapter Two is composed of three parts respectively. The principle example in the first part from which I will draw is the case of America, whose financial regulatory system of asset securitization will be analyzed. It will be revealed that the imperfection of this system contributed to the consequences of the crisis. Then from the perspective of legislation, I will adopt the regulations of asset securitization in the post-crisis Financial Reforming Bill, in order to discover the efforts exerted in preventing regulatory loophole by U.S government. Hopefully, the enlightenments we have acquired from the experience of America will be an effective guidance for newly-developed asset securitization in China. In Chapter three, we will be looking at current situation of asset securitization in China and pointing out the problems. Of course, some useful advices will be given regarding legal supervision of asset securitization and its risks.Asset securitization is a double-edged sword, having opportunities and challenges. Therefore, in the process of promoting the development of asset securitization, we shall neither give up eating for fear of choking, nor unscrupulous. We shall, on the basis of deep summarizing the predecessors’ experience, take its essence and abandon its bad to prudently promote the development of the supervision system of asset securitization of China.