The Research Of American Subordinated Debt Crisis And Revelation For China

According to the"Regulation of Subordinated Debt Issue of Commercial Bank",which is established by the People's Bank of China and the China Banking Regulatory Commission,Subordinated Debt is a kind of special debt which is superior than equity capital at the order of repayment,but less than general debt,including advanced debt and guarantee debt.First of all,subordinated debt has the function of expanding the channels for the commercial banks to raise capital;Second,subordinated debt is good for expanding the investment channels and improving the development of bond market.Third,subordinated debt can strengthen the market restraint to the commercial banks and perfect their systems of management . But subordinated debt also exists some limitation:First,it does not have the anti-risk function as core capital;Second,it just improve the sufficient rate of the bank capital temporarily;Third,the financial lever function increases the risk of shareholder;Fourth,it results in credit risks because of the credit rating and information asymmetry;Fifth,it has the risks because of hiding the problem.This thesis is beginning with the introduction of subordinated debt and its attribution.And it introduces the general concept,function,limitation,production and development of subordinated debt in detail.Then,it talks about the production and development of the subordinated mortgage loan and subordinated debt in America.We can know some background knowledge of the subordinated mortgage loan and subordinated debt in America through the condition of law,market,assets securitization and technology for the production and development of subordinated mortgage loan and subordinated debt in America. In order to know the crisis of subordinated debt in America more,this thesis has introduced the historical origin and reason which result in the crisis of subordinated debt in America.First,the loose system of subordinated mortgage loan creates the system foundation and material conditions;Second,the popular securitization and credit rating on the high side have accumulated enormous credit risks for the crisis of subordinated debt;Third,American Federal Reserve Committee inherits the market-based principle and has not intervened.Relaxed supervision gives the chance for subordinated mortgage loan to enlarge its scale;Fourth,it is the direct reason that American Federal Reserve Committee raises the interest rate constantly and the house market of U.S.A. is depressed.After U.S.A.'s subordinated debt crisis appears,financial institutions,stock and bond markets,lending markets and real estate markets of U.S.A. have all received the impact in various degrees.First,American financial institutions,especial the financial institution which offer subordinated debt,suffer the loss and even go bankrupt in a large amount;Second,the stock and bond market present greater turbulence after the subordinated debt crisis break out;Third,the lending market retrenches and the monetary liquidity tightens in the market;Fourth,the real estate market shrinks further and unemployment rate of construction and manufacturing industry are raised.Meanwhile,the increasing crisis of subordinated debt develops from the financial affair of single country,single market and single operation to the financial turmoil of global financial market and real economy rapidly.The crisis of subordinated debt in America has impacted financial institution,stock market and real economy around the world and has caused violent turbulence.First,numerous financial institutions have failed into the crisis and have suffered heavy losses; Second,greater turbulence appears on the global stock market;Third,the monetary liquidity tightens in the market and enterprises face the financial difficult problem.Today , capital globalization and assets securitization are in the fashion.The change of international capital market,especial the engine of international economy——America,will exert an important influence on the high growing China at the aspect of stock market,house market,foreign trades,foreign investments and foreign exchange reserve.First,the crisis of subordinated debt increases the fluctuation of domestic A stock market;Second,the sale of the real estate market in our country becomes weak and the price of house becomes to decrease;Third,the crisis of subordinated debt brings in secret worry of sustainable foreign trade for China.Fourth,the crisis of subordinated debt influences the Chinese banking industry and the strategy of Chinese foreign investments;Fifth,the fund depression effect of the Chinese capital market rises,RMB appreciation pressure and inflation pressure are strengthened;Sixth,the crisis of subordinated debt brings in secret worry of the security of Chinese foreign exchange reserve.According to the influence and enlightenment for China,this thesis has proposed the suggestions of three respects pointedly.First,strengthen the risk management of the Chinese house property financial market.It mainly embody that the commercial banks should strength the auditing of qualification for the individual real estate mortgage loan and standardize the procedure of examination and approval for the individual real estate mortgage loan.Meanwhile,pay more attention to the economic cycle of real estate and the potential risk of financial innovation under the condition of opening economic.At the same time,commercial banks should improve the robustness of credit,strengthen risk management and advance the construction of risk filter system . In addition , commercial banks should accelerate the securitization of house mortgage loan to disperse the risk of real estate market;Second,strengthen the financial supervision of China further.The financial supervision department of China should strength the supervision of the credit risk of the real estate through using many kinds of financial instruments and requiring the banking institutions implementing the series of policies and demands for real estate credit . Meanwhile , strength the construction of financial innovation system and the supervision of financial derivate products market to keep away from the risk of financial innovation.At the same time,the financial supervision department of China should perfect the model and system of supervision and improve the ability of dealing with the financial crisis. In addition,perfect the form mechanism of RMB exchange rate and the exchange control of capital account.And open the China's financial system in order;Third,asses and implement the foreign investments of China prudently . Know the risk of foreign securities investments correctly and avoid the risk of foreign securities investments.Meanwhile,pay close attention to the risk of financial derivate products and grasp the complexity of the international capital market correctly.