The Research Of Credit Assets Securitization And Market Liquidity

From the very beginning since 2005, the credit assets securitization scale keeps a steady growth rate, but there are some problems existing in the market which need to be improved. This paper mainly focuses on studying the issuance market and the secondary trading market of credit assets backed securities. Based on the study results, this paper will propose meaningful suggestions for the credit asset securitization market and furthermore for the secondary market liquidity issue.Firstly, this paper briefly describes the principles and operation process of credit assets securitization, and then focuses on the analysis of the reasons why China’s commercial Banks carry out credit assets securitization. Based on the research of the dynamics we have found that the main reasons of credit assets securitization including the regulatory capital arbitrage and reducing the financing cost. But increasing liquidity and risk management are not the major consideration in conducting securitization for commercial Banks.Secondly, this paper analyzed the primary market and secondary market of the credit asset backed securities. For the primary market, we analyzes the development status, issuance, etc., the main problem is the limitation of supervision for the issuance and allocation of priority and subprime proportion. For the secondary market, by collating and analysis the trading records of credit asset backed securities, we found that the credit asset backed securities is developing at a relatively low speed. The trading volume does not match the issuance quantity properly.Thirdly, this paper focuses on analyzing the liquidity status of credit asset backed securities in our country and identifying the factors affecting the liquidity. Based on the result that the credit asset backed securities secondary market is at the primary stage, this paper focuses on the liquidity issue, further demonstrates the impact factors of liquidity and the affecting results by using the data argument. With combination of the analysis of the generally used liquidity measure method and the available data, this paper set up a multiple regression model to analyze the liquidity. And it is concluded that there is a strong correlation between the liquidity of credit assets backed securities and turnover rate, credit rating, interest frequency, clearing number. And there is no significant correlation between the liquidity and coupon rate, phase compensation and average annual return. In the meantime, this paper summarizes and analyzes the development plight of credit asset securitization in the secondary market. At present, the development plight mainly includes the small size of issuance, limitation of investor and low return of the securities.At the last, this paper introduces the development prospects of credit asset securitization, and proposes suggestions for developing the credit asset securitization market, especially for the secondary trading market. Credit asset securitization has a huge development potential in our country. Its growth will soar in the next few years and is worth waiting for.