The securitization of non-performing assets means that the asset owner combines some of the less liquid assets to make them have relatively stable cash flow, and then improves the credit, thereby converting them into assets flowing in the financial market. A technology and process for securities. Asset securitization has special requirements for a country's legal, accounting, and taxation systems. In countries or regions that have experienced financial or banking crises, the need to dispose of non-performing assets and assets has become the main driving force for the construction of the local asset securitization market and its system. .
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The securitization of non-performing assets has a phased initiator. In the early stage, government-supported restructuring and non-performing asset disposal institutions were mainly initiated, such as RTC in the United States, KAMCO in South Korea, RCCJ in Japan, and FSRA in Thailand. However, such institutions are phased. With the improvement of securitization legislation and market environment in various countries, commercial NPAS has become a market entity. Among them, commercial banks' securitization of their own non-performing assets is called direct non-performing asset securitization, and professional investment banks' simultaneous acquisition of non-performing assets from multiple banks for securitization is called entrusted securitization.
An important role of asset securitization is to avoid risks, increase the liquidity of assets, and release capital to engage in projects with higher marginal returns. If good assets are realized through securitization and there are no good loan projects, the implementation of securitization will not only not increase the total income of commercial banks, but will reduce their absolute income.
Moreover, the current cost of commercial banks raising credit funds by absorbing deposits is lower than the cost of raising funds through securitization (because the risk of asset-backed securities is higher than that of treasury bonds and bank deposits, according to general pricing principles, The interest rate must be higher than that of government bonds and bank deposits). Therefore, when commercial banks have sufficient funds and do not have suitable loan projects, they lack economic benefits from the securitization of high-quality assets. The securitization of non-performing assets is of great significance for accelerating the batch disposal of non-performing assets, improving the efficiency and effectiveness of non-performing asset disposal, and solving problems such as insufficient asset flow and low capital adequacy ratio of commercial banks.