Latest News:  
Beijing   Overcast/Cloudy    6 / -1   City Forecast

People's Daily Online>>China Business

Trial of asset securitization

By Wang Xiaotian (China Daily)

15:26, March 09, 2012

The headquarters of the People's Bank of China in Beijing. The PBOC is likely to launch a pilot program that allows some commercial lenders to securitize assets. The trial could involve a securitized quota of 50 billion yuan ($7.9 billion). (Photo/China Daily)

Reports: The program could involve securitized quota of $7.9 billion

China is conducting a new pilot program that allows some commercial lenders to securitize assets, said a senior central bank official on Wednesday.

"Based on the results of the pilot program, we would gradually promote asset securitization," said Jin Qi, assistant governor of the People's Bank of China. She declined to give further details.

Securitization is a process that involves packaging the anticipated cash flows of instruments such as loans or receivables into asset-backed securities, which are then sold to investors. It is one of the ways in which assets can be hedged in a derivative market.

Previous reports in the domestic media have said that the trial would involve a securitized quota of 50 billion yuan ($7.9 billion).

This trial is likely to expand the pool of allowable assets to include loans to local government financing vehicles and small- and medium-sized enterprises.

In 2005, the government announced a pilot plan that allowed China Development Bank Corp to securitize its loan assets and China Construction Bank Corp to securitize its mortgage loans.

In the following two years, the range of the pilot program broadened to include some joint-stock commercial banks, investment banks such as China International Capital Corp Ltd, some securities firms and other financial institutions.

However, the process was suspended amid the financial crisis, as the government became more prudent about exploring new financial instruments.

Li Daokui, a professor at Tsinghua University and academic adviser to the PBOC's monetary policy committee, said it is wrong to see asset securitization as the root cause of the financial crisis.

"Asset securitization is the road one must follow to achieve modern finance. The key is how to regulate it in a proper manner."

【1】 【2】


Leave your comment0 comments

  1. Name


Selections for you

  1. Policewomen on duty on Women's Day in Chongqing

  2. World Short Track Speed Skating Championships

  3. North Korea, a beautiful, bright country (Ⅱ)

  4. A foreign lady's charity to Chinese orphans

Most Popular


  1. Defense budget guards peaceful intentions
  2. Will China's economy keep growing or slow down?
  3. Chinese products bring benefits to U.S. consumers
  4. Is international 'hot money' flowing into China?
  5. China's economy to roar ahead amid global woes
  6. U.S. solution to Syria issue doomed to failure
  7. Trust key to stability on Korean Peninsula
  8. Public will increasingly swaying diplomatic policies
  9. Political dialogue is right solution to Syrian crisis
  10. West's pressure no sway on China's defense budget

What's happening in China

Taiwan's pig farmers protest US beef imports

  1. China Telecom sells iPhone 4S
  2. Online traders to get better deal
  3. Beijing to build aviation energy saving center
  4. Wuhan to set up police team to ensure food safety
  5. 6.0-magnitude earthquake hits Xinjiang

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai