The Enlightenment Of Us Subprime Mortgage Crisis On China's Mortgage-backed Securitization

Mortgage-backed Securitization (MBS) was created in America in 1970s, which has been adopted by many countries. It is one of the most important financial innovations, starting a new financing method. It promoted the development of financial market and real estate market. On the other hand, financial innovation is always a double-edged sword. MBS also brings about some risk management problems. In February of 2007, the subprime loan crisis emerged, it became more and more severe, hedging funds forced to be liquidated, global stock market slumped, investment banks proclaimed their loses. It has become a global financial crisis.This paper begins with the introduction of Mortgage-backed Securitization: explaining the principle and risks. It analyzes the causes of US Subprime Mortgage Crisis from the following factors, such as macro-economic, risk management and so on. The paper also states views on the influence of US Subprime Mortgage, China's loan business started relatively late, but developed rapidly in recent years, it certainly will take on a more and more important role in financial market. The paper gives brief introduction of development in housing mortgage loan market. Meanwhile, it analyzes the difficulties and barriers in risk management.Compared with MBS in foreign countries, China's still in primary stage. As one of the representative from Asian new emerging market, the US Subprime Mortgage Crisis has brought about a certain extent of negative effects on China. Combing China's real situation of housing mortgage loan and the influence of US Subprime Crisis, this paper brings forth corresponding enlightenment and policy proposals from macro-control, government supervision, risk management and other aspects.