A Research on the Risk Management Mechanism of the Asset-Backed Securitization of Financial Institutions in China: Perspective of the Subprime Mortgage Crisis

The primitive motivation of asset-backed securitization (ABS) lies in dispersing the risk of the financial institutions, but the outburst of subprime mortgage crisis reflects the enormous risk of ABS. The paper summarizes the procedure and motivation of ABS of financial institution, and then analyzes the forming, spreading and reason of subprime mortgage crisis (SMC) of U.S.A.; finally some suggestions to build the frame of controlling the financial risks systematically to the Chinese financial institutions: clear philosophy and risk culture, complete risk management system, overall financial system innovation, and effective market system.