Ant 20 billion ABS approved to control the risk of online loan

category:Finance
 Ant 20 billion ABS approved to control the risk of online loan


It is also reported that in addition to the approved projects, there are three similar ABS (asset support special plan) projects with a total amount of 26 billion yuan have been accepted by the Shanghai Stock Exchange, and it should be only a matter of time before they are successfully approved.

As we all know, on the eve of the listing of ants, the China Banking and Insurance Regulatory Commission, together with the peoples Bank of China, issued the Interim Measures for the management of online small loan business (Draft for comments) (hereinafter referred to as the measures) to solicit opinions from the whole society. The purpose of this document is to standardize the network small loan business of small loan companies, prevent the risk of network small loan business, protect the legitimate rights and interests of small loan companies and customers, and promote the healthy development of network small loan business.

According to the data, by the end of September 2020, there were 7227 microfinance companies in China. Among them, 249 companies have been approved to carry out network small loan business, among which, ants and wechat are naturally the head network platforms.

After the introduction of network small loan management measures, these large and small platforms will face reshuffle. There is no doubt that non standard financing of network small loan institutions shall not exceed one time of net assets, and standardized financing shall not exceed four times of net assets in measures undoubtedly puts a tight circle on the current ABS unlimited circulation and uncontrolled total leverage financing mode of online lending companies. This shows that for the current network loan company ABS leverage is too large, the market value is too large, and many of its business are not under supervision.

If such a huge financial derivative business is not within the scope of supervision, then keep the bottom line and avoid financial systemic risk will become an empty word.

For ABS, the basic principle of asset securitization is the law of large numbers. As long as the underlying assets are real and dispersed, they are all securitization means supported by normal underlying assets.

Only when there are a large number of scattered basic assets in the asset pool of asset securitization, can we prevent the huge impact of individual asset default on asset cash flow, crack the excessive dependence on the credit of financing entities, and achieve the possibility of risk restructuring and credit enhancement.

The managers of ABS are generally formal financial institutions such as trust, securities companies asset management, public fund subsidiaries and so on. Since its inception, there are numerous successful precedents. In the environment of frequent credit defaults, they seldom hear the negative news of ABS asset management plan, which shows that the managers have a good control of risk. Moreover, the underlying assets of multiple issuers platforms are real and cash flow is abundant, so is the bottom layer of ABS of ant as the issuer. Through the successful implementation of the ant series of ABS, it can be observed that the regulatory authorities do not want to kill the business, but rather regulate the business, consider controlling the leverage of online lending business within an acceptable range, and keep the bottom line of systemic financial risk. Therefore, the approval of ant ABS Project is to carry out business in accordance with the current regulatory provisions. As for the introduction of the new online lending rules draft, and the suspension of ant IPO, the two naturally have a great connection. The reason why the IPO of ant was suspended was that the regulatory authorities found the financial risks and put the brakes on time to control the risks. However, no matter whether ant is listed or not, the new online lending regulations will be introduced, which will only affect its valuation and the specific listing time, but will not affect the listing. Source: time weekly editor: Chen Hequn_ NB12679

The managers of ABS are generally formal financial institutions such as trust, securities companies asset management, public fund subsidiaries and so on. Since its inception, there are numerous successful precedents. In the environment of frequent credit defaults, they seldom hear the negative news of ABS asset management plan, which shows that the managers have a good control of risk. Moreover, the underlying assets of multiple issuers platforms are real and cash flow is abundant, so is the bottom layer of ABS of ant as the issuer.

Through the successful implementation of the ant series of ABS, it can be observed that the regulatory authorities do not want to kill the business, but rather regulate the business, consider controlling the leverage of online lending business within an acceptable range, and keep the bottom line of systemic financial risk. Therefore, the approval of ant ABS Project is to carry out business in accordance with the current regulatory provisions.

As for the introduction of the new online lending rules draft, and the suspension of ant IPO, the two naturally have a great connection. The reason why the IPO of ant was suspended was that the regulatory authorities found the financial risks and put the brakes on time to control the risks. However, no matter whether ant is listed or not, the new online lending regulations will be introduced, which will only affect its valuation and the specific listing time, but will not affect the listing.