China needs legal certainty for securitisation to grow

Author: Karry Lai | Published: 6 Dec 2018

Better liquidity and legal enforcement certainty are needed to support the development of the Chinese securitisation market.

Demand for auto asset-backed securities (ABS), consumer loans and residential mortgage-backed (RMBS) securities is booming in China, driven by consumer growth, infrastructure needs and bank capital constraints. Chinese banks issued RMB200 billion ($29 billion) of RMBS in the first half of 2018. Drivers for the securitisation market include a need for diversification in funding costs and the advantage of off-balance sheet financing.

But to further grow the securitisation market, a well-established legal system is also essential.

"For new markets, a lack of case law can be an impediment," Aaron Lei, senior director & analytical manager, structured finance ratings, S&P Global Ratings, told panelists at the IMN’s Asian Structured Credit Summit in Hong Kong. "A good understanding of how regulations interact...



close Register today to read IFLR's global coverage

Get unlimited access to for 7 days*, including the latest regulatory developments in the global financial sector, updated daily.

  • Deal Analysis
  • Expert Opinion
  • Best Practice


*all IFLR's global coverage published in the last 3 months.

Read IFLR's global coverage whenever and wherever you want for 7 days with IFLR mobile app for iPad and iPhone

"The format of the Review has changed over the years; the high quality of its substantive content has not."
Lee C Buchheit, Cleary Gottlieb