Research On The Impact Of Credit Asset Securitization On The Operating Stability Of China's Commercial Banks

As the foundation of China's financial industry and an important part of the financial market,the operating stability of commercial banks is of great significance to the stable development of financial system and the economy.However,as China's economy enters “new normal”,commercial banks' profit growth rate decreases,liquidity deteriorates,and the non-performing loans rise,financial risk of banking industry accumulates,and the overall risk exposure of the banking industry increases.Under this circumstance,asset securitization develops rapidly,which is a double sword.Although asset securitization can stabilize the bank system's operation through optimizing asset structure,enhancing liquidity and solving bad debts,it can also be a bane for the whole bank system under the situation of over asset securitization.So,the question that if the asset securitization is beneficial or harmful remains controversial in academia.To get more insights of this problem,this paper analyzes the impact of credit asset securitization on the operating stability of China's commercial banks and its specific transmission mechanism based on the panel data of commercial banks in China.The paper proceeds in the following 5 parts.The first part is the introduction.I introduce the background and significance of the research in the first place.Then,it is followed by the literature review.Lastly,I present the main part,research methods,contribution and deficiencies of the thesis,which serves as the foundation for the thesis.To be specific,the first chapter is devoted to explaining the mechanism of the effect of credit asset securitization on the operating stability of commercial banks.Additionally,I also introduce the credit asset securitization and the metric for bank stability theoretically,and finally analyzes the impact mechanism of credit asset securitization on bank stability.The second chapter focuses on the current situation of credit asset securitization.I introduce the history and characteristics of China's asset securitization and summarize the history of China's asset securitization development as 4 stages.The third chapter is the empirical part,which analyzes the impact of the securitization on the bank's operational stability and its specific transmission mechanism.Based on the semi-annual panel data of 16 commercial banks in China from 2012 to 2018,I use the Z index as a proxy variable for bank stability establishing a random effect model to analyze the impact of credit asset securitization on the operating stability of commercial banks.The explanatory variables are the degree of credit assets securitization,and the credit assets securitization,which is a dummy variable indicating if the assets securitization is implemented or not.The study found that asset securitization in commercial banks has a positive effect on the stability of the operation by improving bank asset return and the leverage ratio.The dynamic panel regression is used for the robust test of the model,making the model more reliable.The fourth chapter concludes this paper with remarks on deficiencies of the paper and policy suggestions.