The Study Of Mortgage-backed Securitization In China Under The Background Of The U.S. Sub-prime Mortgage Crisis

Mortgage-backed securitization (MBS), as one of the most important innovations in financialfields for recently40years originated from1970s. MBS was first practiced by the Americanfinancial institutions, which was recognized all around the world, and developed rapidly worldwide,because of its advantages in raising the rate of capital utilization and reducing the bank risks. At thebeginning of the new century, with the yields greatly enhanced, the sub-prime mortgage loanworked well in the American stork-market. As a result, many countries pushed ahead the sub-primemortgage loan in the financial market, which leaded to the prosperous of the mortgage loan market.But the public ignored the risks and finally initiated the sub-prime mortgage crisis in2007.The MBS in our country started relatively late, and has been in the stage of theoretical research,it only started to enter the pilot stage in2005. Although we have witnessed the painful lessons thesub-loan crisis to the world economy, there is no denying the advantages of the securitization ofhousing mortgage loan in the financial innovation. This paper is based on the combination of theoryand case. First, it introduces the important of the MBS in China by explaining the MBS verydetailed. Secondly, the paper summarizes and analyzes the sub-loan crisis in the United States, andexplores the origin of the crisis to prevent the crisis from happening again. At last, through thereflection of the sub-prime mortgage crisis, the paper summarizes the inspiration on China’simplementation of the housing mortgage loan securitization, and puts forward some relevant policysuggestions.