A Research On The Risk Of China's Enterprise Asset Backed Securitization

Asset Backed Securities(ABS) is a kind of financial instrument with strong practicability, such as low financing costs, risk stripping of financing body, flexible structural design and so on. It is popular among banks and enterprises in developed countries as well as in developing countries. ABS in China has entered the phase with rapid growth. However, China's macro environment such as laws and regulations, financial markets construction is lagging behind which cannot meet the needs of existing markets. And participant has not accumulated enough practical experience. Seen from this aspect there are many risks in ABS.This dissertation focuses on issues about the flaws of the financial environment, product structure design, distribution process and subsequent management of the general supervision during the process of ABS. We take a deep analysis on China's ABS with case analysis method and describe the special risks of various types of ABS. The special risk of BT repurchase ABS is that future cash flows mainly depends on government revenue, implied a small probability of huge risk. The special risk of finance lease ABS is that future cash flows are largely affected by other industries. The special risk of accounts receivable ABS is the design of loop structure and non-public transactions. The special risk of immovable property ABS is hidden risks behind the complicated structure design. After all we come up with some suggestions on risk control from the macro and micro perspectives.