| At present, the international financial crisis has already caused great damage to the world economic development and a serious impact on people's lives, in different aspects, from local area to global field, from developed countries to emerged market countries, from the financial sector to the entities in the economic field. At this critical moment, it's significant for us to discuss the causes of sub-loan crisis in order to preserve stability of our finance and promote world economic growth in China. Many reasons caused the financial crisis including the inappropriate macroeconomic policies, and lack of financial supervision. Of course, the risk management of the financial institutions is more important. Only in this way that we understand these reasons correctly, can we avoid the same crisis in the future.This article is focused on qualitative analysis of the U.S. sub-loan crisis. Firstly, the evolution and development of sub-loan crisis was mainly due to the heated market competition and lacking awareness of risks. In detail: it is not synchronized between the financial innovation and regulation; innovation and the strengthening of risk management; financial innovation and sound management mechanism. Moreover, the credit review before the loan was not strict and the understanding of the loan is insufficient. U.S. sub-loan crisis has provided us with a good learning opportunity. It's significant for us to draw on China's financial sector to carry out effective risk management, stable economy, implement the scientific development concept, building a harmonious society. Secondly, the causes of the financial crisis are explained on macro aspects, such as the relationship between virtual economy and real economy; the virtual economy and the relative balance between the real economy should not be broken; the virtual economy and real economy are complementary to each other and virtual economy helps to stabilize the relationship; the relationship between macro-economic regulation and financial deepening; the relationship between financial risk management and financial innovation from developed countries.Since the 90's, the focal point of the investment of U.S. has shifted to the information technology-based high-tech industries. Over-investment in the high-tech field blows a huge stock market bubble. wealth effect caused by the generating market prices and the expectation of good business performance lead to surplus production capacity, resulting in continuous decline in corporate profits and reduction of capital stock.In order to prevent an economic downturn, the United States has adopted a completely relaxed monetary policy, to promote the consumption and investment, which further revealed the lack of government regulation from perspective of microeconomic. Greenspan pursuits low interest rate policy in a long term, and it leads to excessive sub-loans and increasing sub-loan defaults. in the end, the credit crisis developed into a financial crisis sweeping the globe.Because United States has always carried out free economic policy; moreover, the globalization and liberalization of economic activities; furthermore, the calls for the liberalization of financial transactions; the U.S. government cannot control the winds of globalization and liberalization of financial transactions risk, so that a single aspect of the sub-loan crisis transferred into a global economic crisis. Therefore, sub-loan crisis is the inevitable outcome of a free economy of U.S. As an important function of corporate governance and comprehensive risk management model in the financial crisis should be pay more attention.Through the 70's and 80's it has been developed rapidly. However, the U.S. sub-loan crisis has exposed weaknesses of modern risk management techniques. First of all, the development of modern credit risk management only achieved exploratory results. It is far from maturity and perfection; second, almost all the credit risk measurement models contained a variety of assumptions which is different from reality so the effeteness in practice cannot be proved. In addition, some technology which is put forward by experts based on their experience and intuition lacks a solid theoretical support. Even the whole theoretical basis for risk management is still very thin compared to other financial branches.Another prominent manifestations of failure of operational risk management in the financial institution showed up by subprime crisis is the abuse of the financial institution against derivative products.The economical function of derivative products is the risk of hedging, namely the reduction of risk. The trade of derivative products in practice always applies to the opposite direction, namely the speculation and assumption of risk, and they are the investment tools of making a direct profit. However, the development and use of these derivative products have a great risk of operation. The operational risk of misuse of derivative products is one of the prominent manifestations of structure defect in investment bank. In the subprime crisis, there are many financial institutions which suffer from the unparalleled loss besides investment bank. It is a consequence of getting involved in the large-scale investment of subprime product for a long time, and also indicates a strategic error of these financial institutions in the aspects of subprime investment for many years. With further opening of money market in China after the WTO accession, the financial institution have to develop independently in a modern market economy abounding competition and risk by virtue of their capital and ability of risk management.Preliminary achievements were made in the reform of financial institution in china. However, to a great degree, the reform is a kind of"physical change"rather than"chemical change". Because of problems of organization and structure, there are many disadvantages to the commercial bank's Risk Management of credit-awarding followed history in China. It is difficult to eliminate these drawbacks entirely in a short time. So the commercial bank in china is optimizing the fundamental policy of venture management and mnagement system of operational risk at the same time of development. This crisis reminds us that financial institution needs to bring the technique of venture management into the agenda of the top management ranks and the administrative framework of venture management in the company and establish an effective relationship with the company's business in order to play the roles they should play when the risk come. Another question is that during the process of development, banking in China should attach more importance to liquidity risk and technical regulation, and come into being integrated management of inter-product, Inter-account, inter-department and inter-market at the same time of pay attention to credit risk and market risk. Venture management is very important to the survival and capability for sustainable profit of an enterprise. To the management of enterprise, the value of venture management is probably and will be a real competitive edge of corporation's sustained management and development. In order to the development of venture management in the future, our primary task of strengthening venture management is to regard excellent risk culture as the basis of venture management and perfect fundamental policy. In addition, we should cultivate excellent venture managers, study knowledge and technique of venture management ceaselessly, and perfect the guarantee of mechanism of audit venture management in commercial bank.Subprime crisis is a serious blow to the development of modern venture management's technology. However, it will not change the basic developmental tendency of modern venture management. We must study, adapt, even innovate and lead the development of philosophy, system and technology of modern venture management. This is the fundamental guarantee for the invincible status. |
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