Securitization in China – Déjà Vu?
Journal of Structured Finance Vol 21, Issue 3, pp.36-50.
Posted: 3 Nov 2015
Date Written: November 3, 2015
Abstract
In China, securitization has been promoted as a means of reducing reliance on the shadow banking system, and to ensure enough credit keeps flowing to a slowing economy. A cure for China's banking woes may in fact be the instrument that nearly brought down the global financial system – securitized products. In this paper, I examine the history and structure of the Chinese securitization market. Whilst the US securitization market developed as a means to accelerate liquidity, the Chinese securitization market was initially established to deal with NPLs. I discuss the pre- and post-2008 Chinese securitization market. In addition I provide an overview of newer securitized products being introduced to China in an effort to boost confidence in the banking sector.
Keywords: Securitization; China; Liquidity Crisis; Risk Management
JEL Classification: A01, B06, F03, G01, G02, G21, G23, G24, G28
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