Sub-prime crisis, also known as sub-prime crisis, is a mortgage loan mortgaged by real estate. In 2006, with the slowdown in the appreciation of housing prices in the United States, there was a problem in the capital chain of subprime borrowers using the appreciation of housing to refinance, and some subprime mortgages began to deteriorate rapidly, so buyers had to sell their houses to repay the loans. With the reversal of the interest rate level, many subprime borrowers in the middle and late repayment period can't bear the repayment obligation after the interest rate is greatly increased, so they can only choose to default, and non-performing loans accumulate rapidly. As a result, the subprime mortgage crisis surfaced. First, the causes and transmission of the subprime mortgage crisis 1, the real estate market is extremely active to induce the crisis. In order to stimulate the economy, the Federal Reserve adopted a very expansionary monetary policy. After the 13 interest rate cut, on June 25th, 2003, the Federal Reserve lowered the federal funds rate from 6.5% to 1% and maintained it until June 30th, 2004. At the same time, since the 1980s, some institutions engaged in housing credit in the United States began to lower the loan threshold, which not only lowered the income standard of lenders, but also allowed them to obtain housing loans without asset collateral, thus forming housing loans with lower credit standards than before. The interest rate is as low as 1%, the loan to buy a house is unsecured and there is no down payment, the house price is rising all the way, and the real estate market is increasingly active. The income of subprime mortgage is based on the basic platform with low credit of the lender. Once the lender fails to repay the principal and interest as scheduled, the lending institution will suffer huge losses and face great risks. At the end of last century, the booming American economy masked this risk. After entering the 2 1 century, subprime loans became popular in the United States, and loose monetary policy contributed to the active consumer market. The low interest rate saved by the Federal Reserve and soaring real estate prices have created a bright future, and the huge temptation has promoted the vigorous development of subprime mortgages in the United States. And American real estate can't keep rising, and interest rates can't always be ultra-low. In order to prevent market consumption from overheating, from 2005 to 2006, the Federal Reserve raised interest rates 17 times, and the interest rate was raised from 1% to 5.25%. The effect of raising interest rates gradually appeared, and the real estate bubble began to burst. Lending institutions are unable to recover loans, house prices are constantly depreciating and capital turnover is difficult. Due to frequent bankruptcies, financial companies in the new century are the first to suspend trading in new york Stock Exchange. 2. Financial innovation and illegal operation have amplified the crisis. 2 1 century, the trend of world economic and financial globalization has been strengthened, the global interest rate has fallen for a long time, the dollar has depreciated, and asset prices have risen, which has expanded global liquidity and stimulated the popularity of financial products and investment behaviors that pursue high returns and ignore risks. Derivative products of subprime mortgage, as a kind of loan package securitization investment product that buys mortgage from the original lender and sells it to investors, objectively have investment return space. In the low interest rate environment, investors can get a higher rate of return and attract more and more investors. The influence of American financial market and the openness of investment market not only attract American investors, but also attract investors from Europe and other parts of Asia, thus making the demand more vigorous. Faced with the huge investment demand, many mortgage institutions have lowered their loan conditions to provide more subprime mortgage products. This objectively buried the hidden danger of the crisis. In fact, not only the United States, but also major global commercial banks and investment banks, including Europe and Asia, and even China, have participated in the investment in American subprime derivatives, and the amount is huge, which has caused shock waves to the global financial system after the crisis. Some American banks and financial institutions violate the rules and ignore the norms related to high-risk mortgage loans and securities packaging. In this round of subprime mortgage boom in the United States, some banks and financial institutions used the opportunity of mortgage securitization to transfer risks to investors, intentionally or unintentionally lowering the credit threshold of loans, leading to an increase in systemic risks in banking, finance and investment markets. Historically, the standard mortgage down payment was 20%, which once fell to zero, and even a negative down payment appeared. Some financial institutions also deliberately "quietly" package high-risk mortgage loans into securitization products and sell these problematic mortgage securities to investors. The outstanding performance is that when issuing mortgage securitization products, not only did it not disclose to investors the high adjustable mortgage that is difficult for homeowners to pay, but it also did not disclose to investors the zero down payment of mortgage loans for buyers. The opacity of the rating market and the conflict of interest of rating agencies make these serious high-risk assets enter the investment market smoothly. 3. High leverage operation turns the crisis from virtual to reality. High leverage ratio is an important feature of financial transactions in today's capital market. The so-called leverage ratio refers to the multiple of the assets of financial institutions and their own capital. Commercial banks, investment banks and other financial institutions have adopted the leveraged business model, that is, the assets of financial institutions are much higher than their own capital. For a given capital, the higher the leverage ratio, the more assets financial institutions can operate, and the higher the profitability of financial institutions. Financial institutions with high risk preference tend to maintain high leverage ratio. For a given risk preference, the lower the financial market risk, the higher the leverage ratio of financial institutions. For example, in the past five years, Lehman Brothers' return on assets was only 0.76%, but its return on shareholders' equity was as high as 20.39%. The secret of obtaining such high returns is that its leverage ratio is as high as 26.83 times. In the process of achieving high leverage, financial institutions borrow money from the money market by issuing commercial paper or using their securities as collateral, and then invest these funds obtained at low interest rates in high-yield investment products, thus obtaining the spread between them. However, high leverage ratio is also a double-edged sword, with high returns and high risks. After the subprime mortgage crisis, the assets of various financial institutions participating in the subprime mortgage have shrunk rapidly, some have gone bankrupt, and some have tightened their money supply, making it almost impossible to lend between banks. Although the United States and other governments nationalized these institutions and injected capital into banking institutions, they tried to increase the liquidity of funds and enhance people's confidence in liquidity. However, due to the fear that loopholes have not been discovered and serious concerns about credit, financial institutions have greatly reduced or even refused to lend to entities, which has affected the development of the real economy and caused the unemployment rate to rise. But more importantly, due to the subprime mortgage crisis, the stock market plummeted, people's assets were shrinking, and the unemployment rate was rising. Everyone's confidence in the future directly affected the consumption of various countries, thus making the consumption level of the world decline. For emerging market countries, the crisis first comes from the slowdown in import demand in Europe and the United States, not the collapse of the banking system. The economic crisis in the United States has spread from the virtual economy to the real economy, and the test that emerging market countries will face in the economic crisis is likely to be the depression of the real economy, which has dragged down their financial departments. Second, the impact of the subprime mortgage crisis on China's financial market and its enlightenment. In this disaster, China was not spared. The subprime mortgage crisis in the United States has not only had a substantial impact on China's trade, but also on China's finance, mainly in the following points: 1. The capital market was hit hard and the stock market fell sharply. In 2007, China stock market continued to rise, and the Shanghai Composite Index reached 2786 points at the end of 65438+ 10. On August 23rd, in just over half a year, the Shanghai Composite Index broke through the 5000-point mark and reached the historical high of 6000 points on June 65438+1October15th. However, the stock index has been falling since then. As of April 1 1 day, 2008, the Shanghai Composite Index stood at 3,493 points, down more than 2,500 points, or more than 40%, making it the largest stock market in the world this year. With the sharp drop of stock index, the total market value of Shanghai and Shenzhen stock markets has also shrunk dramatically. On June 5, 2007, with the listing of China Petroleum, the total market value of Shanghai and Shenzhen stock markets once reached 33.6 trillion yuan. However, with the stock index falling all the way, the total market value of the two cities is about 23 trillion yuan, shrinking 10 trillion yuan. The evaporation rate is rare in the world, which makes all sectors of society deeply feel the impact of the global financial crisis triggered by the subprime mortgage crisis on the mainland capital market. 2. Foreign exchange reserves have increased substantially, and the appreciation of RMB has accelerated. Affected by the outbreak of the subprime mortgage crisis in the United States, the risks and uncertainties facing the global economy are rising. In the process of the spread of the subprime mortgage crisis, the United States has taken various measures to prevent economic recession, such as interest rate cuts, capital injection and financial subsidies. These policies have greatly aggravated the global liquidity problem. Coupled with the upside-down interest rates between China and the United States, the expectation of RMB appreciation remains unchanged, which can't stop the inflow of international hot money into China, making China once again a safe haven for the preservation and appreciation of international capital. 3. The sharp rise in the price of imported materials has become an important driving force for pushing up prices. The rising prices of international commodities such as oil, grain and iron ore directly increase the production cost of upstream industries in China, which will inevitably squeeze the profits within the industry or transfer the costs to downstream industries. We believe that the possibility of cost transfer to downstream industries increases, leading to cost-driven inflation. The latest data shows that CPI rose by 8.3% in March, up by 5.3 percentage points year-on-year; PPI also increased by 6.9%, up by 4 percentage points year-on-year, and the trend of upstream product price transmission to downstream has become very obvious. Although we can't think that the sharp rise of international commodity prices, domestic CPI and PPI are all caused by the subprime mortgage crisis and related evasive measures, it is undeniable that the subprime mortgage crisis in the United States and its depreciation against the US dollar have indeed pushed up the international commodity prices, which in turn increased the production costs of domestic enterprises and increased the pressure of rising domestic prices. The subprime mortgage crisis caused panic around the world, but on the positive side, this kind of financial innovation in the United States dispersed risks, which still has reference significance for China. Therefore, the author thinks that we should pay attention to the following points: First, we should reasonably regulate our real estate market. There are some similarities between the mortgage market in China and the subprime mortgage market in the United States: it lacks the ability to distinguish and monitor the real income of customers; As the RMB enters the interest rate channel, the repayment pressure of customers will increase, and "quality loans" may deteriorate; If the house price rises for more than 10 years, there may be an "inflection point" and so on. These situations are enough to warn banks to take precautions, strengthen risk management and prevent the so-called "subprime mortgage crisis". Second, intensify the adjustment of industrial structure, actively expand domestic demand and avoid export risks. There are two main reasons for the subprime mortgage crisis: one is the development model of high consumption and low savings in the United States. Second, there are problems in financial innovation. Comparatively speaking, the former is more fundamental and critical. It is precisely because of the low savings and high consumption, a large number of overdraft consumption and high debt in the United States that it has caused serious risks. In the short term, the US government's rescue of the market is beneficial to the United States and even the world, but in the long term, if the development model of high consumption and low savings is not changed, the crisis will still happen again. In the short term, it is difficult for China's export orientation to change quickly. However, in the medium and long term, China must intensify industrial adjustment, actively expand domestic demand, change the export-oriented development model, resolutely implement the Scientific Outlook on Development, and properly handle the relationship between production and consumption, internal balance and external balance. Third, promote export diversification, strengthen the management of foreign exchange reserves and guard against external risks. China is highly dependent on exports, and China is the largest trading partner of the United States. It exports a lot of products to the United States every year. In order to avoid excessive dependence on the American market, it is necessary to promote export diversification and spread risks as soon as possible. At the same time, China has a huge foreign exchange reserve and holds a large number of financial assets, including US Treasury bonds and corporate bonds, which is risky. Therefore, it is necessary to strengthen the management of foreign exchange reserves, strengthen the risk tracking and monitoring of countries with high foreign economic and financial ties with China, and take practical measures to prevent and resolve risks. Fourth, improve the monitoring level in response to the financial crisis, establish a risk early warning system and strengthen the analysis and monitoring of the international financial situation. The subprime mortgage crisis in the United States shows us that even in a country with a relatively developed market mechanism like the United States, there will be no crisis. We are entering a new historical period of deepening market system reform, and asset prices have risen sharply. Facing the sustainable development under the free market mechanism, forward-looking risk regulation and supervision is extremely important. One of the lessons of the subprime mortgage crisis is that financial stability can not only depend on the stability of a single bank, but also examine the risks that may affect the whole system level from a macro-prudential perspective. We should not only pay attention to the risk and supervision of individual banks, but also pay attention to the overall risk of banks at the market level and the impact of changes in macroeconomic environment at home and abroad on bank risks. Do a good job in risk early warning, establish an early risk early warning system as soon as possible, strengthen the monitoring of international economic and financial risks, and prevent international financial risks from being transmitted to China to produce systematic risks. Fifth, while supporting financial innovation, strictly control the operation of all links and put an end to the risk of violation. The direct consequence of mortgage securitization is that after recovering the cash flow, it will mobilize the enthusiasm of banks or subprime mortgage companies to expand the credit scale. Sub-prime loans will not only generate various financial products soon, but also be allocated to the investment product portfolios of various financial institutions. The related highly leveraged financial instruments will amplify their risks, and the leverage effect of financial innovation will be far from the prudent operating principles of financial institutions. Therefore, we must adhere to the basic principle of prudent operation in the process of financial innovation.