Study on Commercial Banks´ Nonperforming Assets Securitization Selection Model

A large number of non performing assets in financial institutions is an important reason for causation and deterioration of financial crisis. Asset securitization is considered the effective way to deal with NPA. The key issue of restricting securitization is the selection of NPA. Firstly this paper introduced definition and market players of asset securitization. Secondly, it put forward the principles that NPA securitized should meet and determined the indexes system. Taking NPA´s recovery rate as evaluation goal, using Expert Scoring Method and Analytic Hierarchy Process to determine the weight of the indexes, the paper built commercial banks´ NPA securitization selection model and explained its usage. It proposed quantitative criteria: the scores of NPA´s recovery rate should be greater than or equal to 0.4, which is suitable for securitization. Finally, the model was tested to verify its feasibility and operability through a case.