On August 18-19, the 8th China Asset Securitization Forum Annual Conference hosted by Shanghai High Gold Financial Research Institute (SAIFR) and China Asset Securitization Forum (CSF) was grandly held in Tianjin. Tu Guangshao, member of the National Committee of the Chinese People’s Political Consultative Conference, executive director of Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University, and co-chairman of CSF, delivered a keynote speech.
Asset Securitization Market and Optimization of Social Financing Structure
Since the 1990s, the general direction of my country’s financial system, especially the optimization of the social financing structure, is to speed up the development of direct financing and increase the proportion of direct financing.
Now that we have entered a new stage of development, high-quality development has put forward new requirements for the financial system. my country’s economic structure and industrial structure must be constantly transformed and upgraded. More innovation, especially technological innovation, is needed to lead the entire new development.
Against this background, the urgency of increasing the proportion of direct financing is further enhanced.
Increasing the proportion of direct financing and optimizing the financing structure is an important part of my country’s financial supply-side reform. It can not only meet the needs of the development of the real economy, serve the innovation drive of the economy, but also help reduce macroeconomic financial risks.
We used to be a debt-driven, especially credit-driven financing system. The allocation of financial resources has played an important role in traditional manufacturing and infrastructure construction in the past, but there are also debt risks that may be caused by excessive leverage. , to arouse our high attention.
But we also found that although we have been emphasizing the importance of developing direct financing, and direct financing is accelerating with the development of capital markets, the proportion of direct financing is still not high.
In general, direct financing and indirect financing need to be coordinated. The main contradiction in the current financing system is that the proportion of direct financing is still not high. This is a problem that needs to be solved continuously at present and in the next step.
In recent years, in accordance with the requirements of the financial supply-side structural reform, the financing system has been continuously optimized. With the development of the capital market, including the drive of asset management, direct financing has also shown a very good development trend.
To increase the proportion of direct financing, on the one hand, it is necessary to rely on increments, and through the continuous development of the capital market, the scale of the capital market should be continuously expanded and the development of direct financing should be promoted. On the other hand, pay more attention to the stock.
In the past, in the process of developing indirect financing, the banking system provided financial support through indirect financing in order to accelerate economic development and ensure economic growth.
Through research and analysis, we have noticed that the scale of debt, especially the scale of credit, has increased, so that many commercial banks must expand their capital adequacy ratios through direct financing to meet regulatory requirements.
This has a very obvious leverage effect, that is, the provision of capital adequacy ratios through direct financing drives more credit expansion, so that the growth rate of direct financing cannot catch up with indirect financing.
Therefore, by promoting the securitization of commercial banks’ stock credit assets, it will play two roles:
The first is to further expand the channels of direct financing, changing from incremental channels to dual channels of incremental stock and expanding the sources of direct financing.
The second is to reduce the pressure on the capital adequacy ratio of commercial banks, which will play a very favorable supporting role for the stability of the bank’s capital adequacy ratio, and is conducive to the sustainable development of the bank.
Asset securitization plays an important role in accelerating the development of direct financing and optimizing the social financing system, which makes the asset securitization industry and market development have strategic significance and can better serve the strategic tasks of the domestic financial system.
Asset Securitization Market and Resident Wealth Structure Transformation
At present, my country’s residents’ wealth structure is facing a transformation. By the end of 2021, the total wealth of Chinese residents will be close to 700 trillion yuan, second only to the United States.
However, in the wealth structure of residents, the proportion of financial assets is still relatively low, and real assets, mainly real estate, account for about 70% on average. Among financial assets, cash and deposits account for nearly 50%. The dispersion and diversification of residents’ wealth assets is insufficient, and the proportion of financial assets needs to be promoted.
From the international development trend or historical development process, developed countries have a process of increasing the proportion of financial assets.
From the perspective of China, with the development of the economy and the increase of residents’ income, the transformation of residents’ wealth structure will also be accompanied by an increase in the proportion of financial assets. Asset securitization is one of the important channels.
The transformation of residents’ wealth structure and the increase in the proportion of financial assets require the supply of high-quality financial assets. At present, the banking system has huge credit assets, and there are many high-quality assets in the credit assets.
To activate these high-quality credit assets through asset securitization is to expand the channels for providing financial assets to residents through securitization.
For example, some of the asset securitization products of large commercial banks have very high ratings internationally, which shows that there is a very large market demand for credit asset securitization. This is a very important channel. very important meaning.
The transformation of residents’ wealth structure is closely related to the optimization of my country’s social financing structure and the increase in the proportion of direct financing.
It is of strategic significance to support the transformation of the wealth structure of Chinese residents through the continuous development of the asset securitization market, thereby promoting the development of the capital market and promoting the optimization of the financing structure.
The Progress of Asset Securitization Market and Comprehensive Business Model of Commercial Banks
Changes in the financing system and the transformation of residents’ wealth structure require the support of asset management.
Compared with the strong market demand for asset management, the asset management industry is currently facing a shortage of supply, and an asset management institution with strength, capability and level is urgently needed.
At present, the asset management industry is constantly expanding, including various asset management institutions such as banks, insurance, funds, trusts, and third parties. The standardization, competitiveness, and service aspects of the industry are constantly improving, but in general, there are Insufficient asset management institutions with strength, capability and level, and insufficient service supply capacity in the asset management industry are the main contradictions in the asset management market.
In the financial institution system, commercial banks are currently the strongest. In terms of asset management, commercial banks have very good advantages and foundations, and they have also established wealth management subsidiaries to transform into the asset management industry.
With the transformation of the financing system and the increase in the proportion of direct financing, the transformation of commercial banking business has become a very important aspect of financial system optimization. The business transformation of commercial banks not only supports direct financing, but also improves the ability of commercial banks to develop comprehensively and sustainably, which is a new growth point for commercial banks.
Gradually carry out comprehensive operations, increase supply in the asset management industry, enhance the capabilities of commercial banks in asset management, and continuously expand the field and scope of commercial banks in asset management, which is conducive to the adjustment of commercial banks and the entire financial system. Form interaction and a virtuous circle.
In the process of credit asset securitization, the development of asset management business by commercial banks is also conducive to the optimization of the entire chain of asset securitization tools. When a bank issues a loan, it can be connected with the next step of asset securitization.
For example, many credit loans are now withdrawn after maturity. If the credit assets are continuously converted into securities in the future, various considerations should be taken into account when making loans, and the space for the conversion of credit assets into securities will be reserved, which will make the business chain of commercial banks form. Orderly connection is conducive to improving the effect of asset securitization conversion in the future.
The asset securitization market and the asset securitization market have a sound structure
The asset securitization market has huge development needs and broad development space, but it is closely related to the optimization of its own market structure. Only by continuously optimizing the asset securitization market structure can it provide favorable support for the continuous development of the asset securitization market.
From the perspective of market structure, there are two issues that need to be paid attention to.
First, the structure of the primary market and the secondary market of the asset securitization market.
At present, the primary market of the asset securitization market is relatively strong, and the development of the secondary market needs to be accelerated.
In this process, we need to pay more attention to the structure of the secondary market, and we need more asset management institutions, including private equity institutions, to enter the secondary market, and to better drive the primary market through the development of the secondary market. The primary market will definitely make the primary market function more complete.
In order to develop the primary market, it is necessary to further improve the secondary market, especially in terms of investor structure, and to develop products in the secondary market more oriented to the needs of buyers. This process may be gradual, with primary and secondary In the process of market development, some can find transitional arrangements, and the development of the secondary market requires the linkage and cooperation of all aspects. During the development of the secondary market, some intermediate products can be developed to make them more marketable. For example, assets can be repurchased, and some pledges can also be made.
The degree of refinement can be improved, and an orderly connection can be formed for the further development of the secondary market in the future.
Second, asset securitization should further study the underlying asset structure.
Nowadays, more credit assets are mainly traditional assets, and traditional industries have many high-quality assets, which are transformed through asset securitization.
In addition, we need to consider forward-looking. With the development of the economy, technological innovation, green economy, and digital economy, the underlying assets may have some new asset forms in the future, and we should pay attention to new asset forms.
In the process of asset securitization in the future, for the underlying assets of new asset forms, there must be cutting-edge research and consideration, in order to make asset securitization continue to advance with the progress of economy and technology, and make more asset structures and asset forms. It can be incorporated into the process of asset securitization, so that the form, type and economic development of asset securitization assets can be well connected.
For example, intellectual property rights, technological innovation will inevitably bring more intellectual property rights, and the securitization of intellectual property rights is being initially tried.
For another example, with the development of the digital economy, data assets are a very cutting-edge issue, and data assetization has not been fully realized. Data is an asset, and data is an element, but how does data as an asset establish the form of an asset?
In the development of the digital economy, the role of data elements in the development of industries, economies, and enterprises will become more and more important. There is a process of capitalization. Of course, how to capitalize data and realize asset securitization requires more in-depth research and development. practice. There’s also the green economy and dual carbon. Carbon market management, including carbon market development and how carbon assets are securitized, also requires cutting-edge research.
All in all, the new asset form represents the asset form of economic transformation, high-quality development and sustainable development, and at the same time will form a potential asset form of asset securitization.
However, from the new asset form to securitization, there are many problems that need to be solved, such as cash flow model, information disclosure, rights confirmation, etc., all face specific problems. If we come to study together, we will surely make this process move forward continuously.
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