Research On The Effect Of Asset-Backed Securitization On Bank Risk-taking In China

Asset securitization is regarded as one of the most successful financial innovation tools in the 20 th century.Through structured arrangements,it plays an active role in improving bank asset structure,risk transfer and liquidity enhancement.However,the accumulation and transmission of risks in the financial crisis have become the focus of controversy in the industry and academia.Domestic research started relatively late,focusing on the theoretical description of the motivation and effect of asset securitization.Empirical research also focuses on Bank of America,but has not yet formed a comprehensive and systematic study.China’s financial reform continues to deepen.Asset securitization,as one of the most important financial innovative tools for activating of deposit assets,making full use of incremental asset and serving the real economy,has developed rapidly since its restart.However,the market is still immature,and it has two sides in practice.Therefore,it is necessary to conduct a more in-depth study on the relationship between asset securitization and risk-taking of banks in China.The theoretical and empirical research has important theoretical value and practical significance for alleviating the market’s worries about asset securitization products and promoting the healthy development of bank credit.Focusing on the research topic of the impact of asset securitization on bank risk-taking,this paper combines quantitative and qualitative methods.In theoretical analysis,this paper systematically expounds the impact of asset securitization on bank risk-taking,and combines with the actual situation since the restart of asset securitization,specifically analyses the transmission mechanism of asset securitization on bank risk-taking from three aspects: liquidity improvement,credit risk transfer and profit increase.Based on the theoretical basis and hypothesis,this paper takes 135 banks in China as the research sample and the period of 2012-2017 since the restart of asset securitization in 2012 as the research period,empirically examines the impact of asset securitization on bank risk-taking,and introduces the intermediary effect model to further explore the existence of its three transmission paths,so as to provide new information for the development of asset securitization in China.Empirical evidence supports this.The main conclusions are as follows:Firstly,based on the summary of relevant research,this paper analyses the impact mechanism of asset securitization on bank risk-taking.It is found that asset securitization has two-way uncertainty on bank risk-taking.Banks can use asset securitization tools to transfer and diversify risks,activate loan stocks,improve liquidity,and find new profit growth points,to slow down bank risk-taking.However,the decline of risk measurement,adverse selection and moral hazard will encourage banks to take more risks.Therefore,the impact of asset securitization on bank risk-taking depends on the positive and negative net effects.Secondly,The empirical results indicate that there is a significant negative correlation between asset securitization and bank risk-taking,which indicates that since the restart,under the principle of prudent supervision and sound promotion,bank credit asset securitization has played a more positive role in reducing bank risk-taking.Finally,the empirical test of transmission path shows that asset securitization has a partial intermediary effect on the transmission path of liquidity effect,while credit risk transfer and profitability effect have not been highlighted.The empirical evidences suggest that asset securitization can reduce the risk-taking of banks by increasing the liquidity of banks,which is also in line with the actual development of asset securitization in China at this stage.