The rise of China's securitization market

Ya Tang, Daixi Chen, Jing Chen and Jianguo Xu

Financial Markets, Institutions & Instruments, 2017, vol. 26, issue 5, 279-294

Abstract: We study the development of asset securitization markets in China. We manually collect all asset securitization projects and securities data from 2005 to 2015. Inspection of this sample combined with related policy changes reveals distinct characteristics and some potential problems. At the macro level, asset securitization market in China is policy driven, regulation‐segmented, and highly illiquid. At the micro level, the underlying assets are mainly corporate loans or assets, rather than mortgage or consumption loans as in the US and European markets. State owned commercial banks and enterprises enjoy significantly lower interest rates when issuing securitization bonds. Finally, risk‐isolation and credit enhancing techniques significantly improve the rating of asset‐backed securities.

Date: 2017
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https://doi.org/10.1111/fmii.12090

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Persistent link: https://EconPapers.repec.org/RePEc:wly:finmar:v:26:y:2017:i:5:p:279-294

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