Analysis of Real Estate Asset Securitization and Liquidity from the Perspective of Financial Crisis

Abstract

Asset securitization refers to the behavior of converting illiquid assets into securities that can be bought and sold freely in
the financial market to make them liquid. It is a direct financing method through the issuance of securities in the capital market and
the money market. It includes four categories: physical asset securitization, credit asset securitization, securities asset securitization,
and cash asset securitization. Asset securitization in a narrow sense refers to the securitization of credit assets. According to the
different types of assets to be securitized, credit asset securitization can be divided into mortgage-backed securitization and assetbacked securitization. Once a crisis occurs, it will inevitably lead to pessimistic expectations of the subprime mortgage market,
which will impact the capital chain of the loan market, and then affect the entire mortgage market. At the same time, the price of
the real estate market will continue to fall because of the psychology of house owners to stop losses. The superposition of the two
factors forms the Matthew effect, a vicious circle appears, which makes the crisis intensified.