True Sale Securitization

Since the 1970s securitization has become a major financial techniquein the international financial arena. Most developed countries andsome developing countries utilize it for financing and hedging creditrisks. After the Basel II Accord was released in June 2004 true salesecuritization transactions play an increasingly important role for banksto find cheap funding and therefore to gain or increase theircompetitiveness. All member states of the European Union willimplement the Basel II Accord into their domestic laws. German banksand the German Federal Ministry of Finance are seeking new methodsand policies to support them.The incentive for this study is provided by the similarities between theGerman and Chinese financial system. In addition due to China'scommitments to the World Trade Organization (WTO) China is underhuge pressures to open its financial market to foreign banks. Analyzingthe legal obstacles that lie in true sale securitization transactions inGermany I will draw some useful conclusions for developingsecuritization in China.