| Summary: | 碩士 === 輔仁大學 === 金融研究所 === 92 === Abstract
Under the sweeping influence of the global economic recession in early 2000s and the hollowing out effect of investments by Taiwanese companies in China, the domestic economy has deteriorated substantially. For instance, domestic GDP growth rate fell from 6.68% in 1998 to -2.18% in 2001, while the unemployment rate rose from 2.45% to 5.22% over the same period. Moreover, the total NPL ratio of the banking industry rocketed up from 3.82% to 8.04%, and even this figure was widely believed to be a gross understatement due to the loose definition of doubtful loans. The massive increase in default rate, especially in mortgage lending, has highlighted the severity of the depression in the overall economy, and the property market in particular. As a result, reviving domestic economy has moved up to the top priority of government policies.
July 2003 saw the enactment of regulations purported to the securitisation of properties. This marked the beginning of an era in which a new market for securitisation products was born. It arises at a blessing from all financial, government and academic sectors. Experiences in other countries show that securitisation of properties has fulfilled the expected result of reviving the property market with increasing liquidity and stabilising prices.
The positive results in other countries provide a good lesson for the development of domestic market to follow. The successful establishment of a new financial product depends on the degree of liquidity it offers. The availability of conduits for investors to enter and exit the market swiftly without excessive costs will be one of the most important factors in the development of the securitisation market. This thesis recommends that, apart from the development of a sound legislative framework, four major areas of improvement can be taken to facilitate the operation of the new market at this early stage of development. 1) Property backed securities: ensure securities issued are of high quality and good credit ratings, and of appropriate sizes; 2) Information dissemination: strengthen the transparency of information provided to investors and compile relevant market indices for the property securitisation market; 3) Enlarge market participation: encourage public listing on the TSEC or OTC stock exchanges and establish new distribution channels to stimulate transaction volume; and 4) Marketing: active promotion by both public and private sectors. The success of newly created markets for other innovative financial products in Taiwan suggests that there exists a great growth opportunity for property securitisation. Meanwhile, efforts should be focused on protecting market participants’ and investors’ rights to ensure the stability of this highly regarded market.
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