The Research On The Securitization Of Non-performing Asset For The Assets Management Companies Of China

With the economic structure transforming and the economy growth slowing down,the non-performing loan ratio and non-performing loan balance of China have been rising since 2013.The enormous non-performing assets have a deleterious effect on the stability of the financial market and the development of China's economy.Asset Management Company(AMC)is a professional institution for dealing with non-performing assets.Under the pressure of large-scale nonperforming assets storage and capital scale requirements of supervision department,AMCs have to explore new methods to digest non-performing assets efficiently.Non-performing asset securitization originated from the United States,it refers to the process of combining non-performing asset as fundamental assets pool and transferring it to Special Purpose Vehicle(SPV)to avoid risk.Then the SPV issues the asset-backed securities paid by the cash flows due on the assets.This innovative financial instrument has been used by many countries for batch disposal of nonperforming assets and achieved satisfactory results.China learned from foreign advanced experience and officially launched the pilot program of non-performing asset securitization in 2016.However,in terms of product quantity and issuance scale,the participating institutions,especially financial asset management companies were not enthusiastic.Firstly,this paper starts from the theory of asset securitization,introduces domestic and foreign development and situation of non-performing assets securitization.Secondly,this paper studies on Huarong's non-performing asset securitization practical case,which illustrates that securitization is a better choice for AMC to deal with non-performing assets.Finally,this paper gives some policy suggestions for the problems and challenges faced by the non-performing asset securitization of China.