The Analysis Of American Financial Leveraging

The American financial crisis has a worldwide influence, not only to American finance and economic, but also to global finance and economic. The crisis this time began with American subprime crisis which is just one cause, and the root cause is the unreasonable use of financial leveraging. Financial leveraging is the result of finance innovation with the development of economy; it meets the needs of what economic ask finance for. But the financial leveraging can birth the finance bubble, it is a double-edged sword. The study of American financial leveraging not only will help to explain the current financial crisis, but more importantly, to know financial leveraging better, pursuit the rational use of financial leveraging and promote the healthy development of finance and serve for the real economy better.Financial leveraging not only can improve the liquidity of financial system, accelerate the accumulation of wealth, promote price discovering, enhance the efficiency of the monetary policy and avoid inflation; but also can enlarge the financial risks of financial institutions, result excessive economic financializing and magnify the systemic risk of finance. The risk of financial leveraging is potential, it can be avoid by the effective supervision of the regulator and the norm operation of the financial organizations. The American excessive financial leveraging not only accelerated the growth of American financial assets, increased the contribution of finance services industry to American gross domestic product; but also made the American financial institutions vulnerable, finance derivative products be divorced from the real economy, the system risk transfer and spread in multi-level, finance avoid the supervision and sparked the American financial crisis. The real rational return of financial leveraging need the efforts of both financial institutions and regulators to search for a balance between market efficiency and risks.