Study On Risk Assessment Of Consumer Financial Asset Securitization Project Of Z Trust Company

As a modern financial service mode,consumer finance satisfied low-and middle-income groups' financial service demand in consumption,which effectively promoted the upgrading of the consumption industry.With the rapid development of the consumer finance industry,consumer financial institutions providing consumer loan services urgently need to seek stable and low-cost sources of funds.As consumer financial assets have the characteristics of high homogeneity,small amount and dispersal,it can break through the credit and financing restrictions of issuer and obtain a higher rating than that of issuer through securitization.Under the background of promoting the development of consumer credit innovation products and emphasizing the importance of securitization of credit assets by government,consumer financial institutions began to improve the liquidity of assets through asset securitization.However,the complex structure and multi-participants of asset securitization make its risks diversified,difficult to identify and difficult to control.That is why risk assessment of consumer financial asset securitization by managers is still at the exploratory period.In order to effectively regulate business and achieve better and faster development,managers of asset securitization project represented by trust companies need to form a standardized risk assessment process for consumer financial asset securitization as an innovative business.This paper takes JH consumer financial asset securitization project of Z trust company at the top of the list as an example,referring the advanced risk assessment methods of asset securitization to explore the risk assessment process of consumer financial asset securitization project from the perspective of project manager.The research contents are as follows.First,introduce the background and significance of the research,review and summarize the research results of existing scholars.Then,analyze risks and the cause of risks of consumer financial asset securitization.This part divided the project risk into five categories that is the risk of issuing entity,the risk of underlying asset,the risk of transaction structure,project manager and legal risk.Next,introduce the background,general situation,underlying asset characteristics,and transaction structure and credit enhancement measures of the project.Then,assess risks of the project from the perspective of Z trust company.The risk assessment of the project is divided into risk identification,risk assessment,cash flow prediction and stress test.In the risk identification part,the project risk identification flow chart is drawn with the transaction structure as the main line to expose the possible risks of the project in turn.In risk assessment part,issuing entity,underlying assets,transaction structure,duration management and legal risk are evaluated.In order to test the stability of transaction structure,this paper introduces the cash flow prediction and cash flow pressure test.By assuming different pressure conditions,this paper tests whether the cash flow of project can cover the principal and interest of security under different pressure conditions to deepen the risk assessment of transaction structure.Finally,this paper puts forward four project risk prevention advice according current situation of consumer financial asset securitization,including using innovatively Credit Risk Mitigation(CRM),measuring accurately project risk by financial technology,introducing third party assets service and exploring external promotion means.