Transfer Of Credit Assets

according to Statistics China's business in the first half of 2010 Bank Newly issued bank letter cooperation The products amount to 2422, and the scale of Chinese banks' outward loans, which exist in the form of investment products, amounts to about 2 trillion and 300 billion yuan. Because banks only act as intermediary or agent in the past, such financial management business has been divided into the intermediary business of banks, and related assets have been listed as "off balance sheet" assets.

The credit assets trading rule of Beijing financial assets exchange has recently been promulgated. Its credit asset trading business is to standardize and transparently trade private credit transactions in the past, and to expand the trading radius of each trading entity, reduce transaction costs, improve transaction efficiency, control transaction risk and maximize the protection of investors' interests.

Silver letter new regulations promulgated

In the field of commercial banking, there has always been a contradiction between capital adequacy ratio and capital yield rate. The CBRC has strict control over the credit scale in order to control credit risks and for the sake of macroeconomic regulation and control. Therefore, under the condition that credit assets transfer platform is not yet mature, banks, through cooperation with trust companies, issue credit cooperative financing products, which will transfer credit to the off balance sheet, and become a "safe way" for banks to move credit space and release capital and reserves.

According to statistics, in the first half of 2010, China's commercial banks issued 2422 new cooperative products of silver and credit, and the scale of Chinese banks' outward loans in the form of investment products amounted to about 2 trillion and 300 billion yuan. Because banks only played intermediary or agent roles, such financial services were classified into intermediary businesses in the past, and related assets have been listed as "off balance sheet" assets.

This mode of operation has changed significantly with the notice issued by the CBRC in August this year on regulating matters related to bank credit and financial cooperation.

Seventh of the "notice" stipulates that commercial banks need to transfer the off balance sheet funds into the table within the next two to two years. On the one hand, the large sum of off balance sheet loans will be transferred to the table. On the other hand, the credit line of the new loan will be 7 trillion and 500 billion yuan in the year. The credit space of the bank will be reduced in the next one or two years.

Under such a background, it is more urgent to build a platform for transferring credit assets. Commercial banks can quickly withdraw funds through credit assets transfer, raise capital adequacy ratio, transfer credit risk, release the liquidity of bank funds, and more importantly, avoid the contradiction of rising asset liability ratio.

Platform construction speed up

In fact, the transfer of credit assets has been there before. The transfer of credit assets in China began in July 1998. The Shanghai branch of Bank of China and the Shanghai branch of Guangdong Development Bank signed the agreement on the transfer of bank loan claims, becoming the first single credit transfer in China, and the transfer of credit assets in 2002. Since then, banks have always had the demand for credit asset transactions.

However, due to the lack of trading norms and the lack of a trading market, the transfer of credit assets is mostly a "one to one" private bargaining transaction between banks and banks, which has been completed under the agreement. Because there is no public transfer platform, these assets are mostly scattered and small-scale OTC transactions.

For example, when a bank's credit line is very tight, it may choose to sell part of its assets to get the money back as soon as possible, but the bank can only link itself through its own small circle, so the cost is very high and it is difficult to generate a premium.

On the other hand, China's credit asset securitization actually began to practice in 2005. In April 2005, the CBRC issued the "credit assets securitization pilot management measures". In November 7th, it issued the "financial institutions credit assets securitization pilot supervision and management measures", completed the credit asset securitization system design.

Then in December 8th of that year, the CBRC formally approved CCB and CDB as a pilot project to issue credit asset backed securities in the interbank bond market. In December 15th, two pilot banks issued securitization of personal housing mortgage loans respectively - yuan yuan in 2005 and 3 billion yuan in 2005, and 4 billion 178 million yuan in 2005.

As of November 2008, in the past three years, the total issuance of credit asset-backed securities was 66 billion 800 million yuan, and 19 issues were issued in the interbank bond market. Among them, Pudong Development Bank, Minsheng Bank and Zhejiang Commercial Bank were involved.

Just as the development of credit asset securitization in China is booming, the financial turmoil that triggered by the subprime mortgage crisis in the field of credit asset securitization has swept the globe. It has also brought the newly emerging credit asset securitization back to the abyss.

In 2010, the securitization of credit assets was reinstituted. The central bank's development report on China's financial market released at the end of April this year pointed out that due to the increase in credit volume, the pressure on the transfer of loans from banks increased. Commercial banks hoped to raise capital adequacy ratio through loan transfer, or to make room for credit space, so that the construction of flat transfer of credit assets would be accelerated.

Information shows that in the first half of this year, the scale of loans reached through credit cooperation reached 2 trillion yuan. However, with the implementation of the new rules of credit cooperation, the channels for the transfer of credit assets have begun to narrow. Under such circumstances, the emergence of the two tier market of credit transfer is ripe.

At the 2010 summer Davos forum held in Tianjin, the central bank leaders pointed out that "we need to promote the securitization of credit assets and explore the establishment of a centralized loan transfer platform" when talking about solving the credit risk of local government financing platform.

Trading rules issued

In May 30th of this year, the Beijing financial assets exchange was established. On the 11 th of February, the Tianjin financial assets exchange was unveiled, and the long term credit transfer market in Shanghai also made substantial progress. Shanghai's credit transfer market is led by the central bank and managed by the China foreign exchange trading center. In August of this year, Fang Xinghai, director of Shanghai financial affairs office, said that Shanghai had approved the central bank's approval to establish credit transfer market. Not long ago, a market agreement was signed between the members of the Shanghai gold exchange.

Together with the Shenzhen financial market trading service platform which started in November 2009 and the syndicated loan transfer market led by the China Banking Association, five independent bank credit assets trading platforms have appeared in the whole country.

The issuance of the credit assets transaction rules of Beijing financial assets exchange indicates that China's credit asset transactions begin to shift from scattered, small-scale OTC transactions to mass and large-scale intra floor transactions.

The rules eventually formed the 1+9 system matching system, covering the whole process from transaction application, listing, bargaining / bidding, transaction, settlement, registration to asset management.

At present, these platforms only refer to the transfer of credit assets without mentioning credit asset securitization. In accordance with the traditional equity trading institutions' concept of transfer of corporate equity, selling packages instead of selling them is a transaction of credit assets rather than securitisation transactions, so there will be no such problem as the subprime mortgage crisis in the United States.