Why Does The USA Miss The Best Opportunity Of Governing The Financial Crisis

Any economic turmoil happened in the U.S.A., the biggest economic entity, will spread to all over the world because of globalization. The order of international financial system was shocked by the subprime crisis happened in August, 2007. The strong credit retrenchment happened in the financial market and the systematic risks accumulated in the financial system are exposed and the risks are still spreading.The article describes the current financial crisis on the global financial system caused by the severe impact, the birthplace of the crisis the U.S.A in particular. The financial system of the U.S.A has suffered an unprecedented shock and damage. Bear Stearns Cos., Lehman Brothers, Merrill Lynch went bankrupt or had been acquired at a low price. AIG is seeking capital raising. And these are the primacord of the financial crisis. All the financial institutions which played a part in the subordinated debt and the sub-prime derivatives created huge losses. The country which develop mainly in financial sector and financial assets far beyond GDP, such as Iceland, face the threat of national bankruptcy, followed by different levels of the domestic real economy shrinking, unemployment rising, depression of economic development, spreading panic. And the article analyzes the deep-seated causes of the crisis. There are three points. First, the subjects in the crisis ignored the risks for getting more and more benefits. Second, the risk was covered because the risk of the subprime derivatives shifted. Third, the credit rating agencies in the U.S.A was given a higher credit rating for the subordinated debt, in order to attract more investors. FINRA should be responsible for the financial system's development and innovation with no fear of the risks. The FINRA did not control the development of the subprime market and innovation of the lending, so that the num of subprime mortgage loan increased rapidly. Since the mode of financial regulation in the U.S.A is two lines and the various departments, the supervision presents the vacuum, and it's very difficult for investors to determine the level of its risk, and the derivatives such as CDO and CDS should be supervised by Fed or FDIC or SEC, has never clarified explicitly, so the risks transfer and expand so fast. After the outbreak of the crisis, The U.S government failed to judge the situation correctly, and the measures to rescue the market were not in a timely and decisive manner. And when handling the crisis, there was no sufficient well organized and comprehensive analysis of possible risks. These are the reasons why the U.S government handled the crisis in the wrong time.China in the crisis learned experience about the reason why the U.S.A government handled the crisis in the wrong time, so our government has made timely policy options to deal with the financial crisis, and has a proactive fiscal policy to resolutely 4 trillion investment plans, in order to stabilize the market's confidence..But the financial crisis has impact on China's economic growth to certain degrees. We should find our own shortcomings in the crisis and improve them in the future economic development, to change our model of economic growth to better adapt to the international economic environment.