China needs to develop asset-backed securitization: central bank official

08:48, April 29, 2011      

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China needs to develop more financial services geared toward asset-backed securitization in order to limit risks in the banking system, an official with China's central bank said Thursday.

Liu Shiyu, deputy governor of the People's Bank of China, made the remarks during a summit forum concerning risk management in the bond market here in Beijing.

Converting non-liquid assets to freely traded bonds could help adjust product structures in the bond market and ease risks in the banking system, analysts have said.

"Promoting the development of asset securitization is directly related to the healthy development in the bond and stock markets," Liu said.

Asset-backed securitization financing accounted for 32 percent of American trusteeship of corporate bonds, while the ratio in China is less than one percent, according to Liu.

He said China should create a non-public pilot plan to issue the bonds.

Source: Xinhua
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