When China Development Bank and China Construction Bank won approval to securitise assets in 2005, it was mooted as the regulatory strike that would ignite the market in China. Then, for almost a year, everything went quiet and the experiment was dismissed as little more than a flag-flying exercise. Now, Chinese regulators are in the throes of giving the nod to as many as 10 domestic banks and asset management companies.
After several false starts, industry experts are confident that this next batch of trials will be the catalyst for a genuine securitisation market in the world’s fastest-growing economy. “It is highly likely that this could lead to something real,” says Larry Lee, managing director and head of Fitch Ratings China. “The second pilot will open the door to big issuance going forward and a viable securitisation market in China.”
