Research On The Lease Asset-backed Securities (ABS)

Asset-backed Securities(ABS),as part of contemporary financial innovation,originated from America with a history less than 50 years.The essence of ABS is to solve the financing problems with the resources of the capital market.Lease ABS is an emerging business in China,on which only a few domestic researches have been dedicated.In the West,however,the financial crisis that broke out in 2007 in major developed countries was initially generated from the ABS in the real estate industry of America.Therefore,the development of ABS in foreign countries has been profoundly influenced in recent years and the practical activities of the theory are getting weaker.After taking on the excellent opportunity for development in 2007,the financial leasing industry in China is now confronted with financing difficulties as well as the upper limits for asset size.It is the ABS that is able to solve the problems that bottleneck the leasing companies.Therefore,the combination of leasing assets and ABS is an inevitable product generated by the development of capital market.With the Lease ABS supporting policies by China Banking Regulatory Commission(CBRC)and China Securities Regulatory Commission(CSRC)in November,2014,Lease ABS has gradually become a major financing means of the financial leasing industry in China over the past couple of years.The paper elaborates on the advantages and disadvantages of Lease ABS based on the author's understanding of and experience in Lease ABS,as well as the current situation of financing channels of Chinese leasing companies.On the one hand,it is well noted that Lease ABS is of great help to solving the problem of “financing difficulties and high costs”.On the other,Lease ABS cannot be a universal “solution” to everything and it should be utilized after a strict prevention against risks of ABS.Moreover,prospects are presented for the development of Lease ABS,to provide theoretical exploration basis for the future further development on this subject.