The Origin, Impact And Enlightenment Of The Subprime Crisis

In 2007,the most important event of the world was the subprime mortgage crisis of the United States. This crisis originated from the real estate mortgage market in the United States as a relatively small scale of increase of the credit default rates, has been inadvertently spread to the world, causing great economic panic. So far, there are many mortgage companies going bankrupt. The large and prominent banks and investment banks in the world (including Citibank, JP. Morgan, UBS, Merrill Lynch, Goldman Sachs, Bear Stearns, etc.) suffered huge losses without exception. The confidence of the global capital markets has suffered a heavy blow, and the prospects for world economic development has thus been cast a thick shadow. Though the final estimations of the loss are different, the estimated amount of the loss is very huge. So far, the crisis is still continuing, no one knows the result of this disaster. However, the impact of the crisis will be far-reaching, people began to reflect on the past period of time the development of the global financial market problems exist. It is estimated that in the next period of time, some of the global financial market system will be changed and the direction of development of the financial markets will also be adjusted.The shadow of the global financial market crisis made the global economy face enormous threats. The financial market of China is in the rapid growth. In these backgrounds, there is a great significance to China to study the process of the formation of the subprime mortgage crisis, the reasons for the crisis and the impact of the crisis. With these studies, we can avoid some unnecessary losses in the development of China's financial derivatives. In this paper, first I make a simple description of a number of experts and scholars on the analysis of subprime mortgage crisis. Then I introduce the breeding of the crisis -The United States real estate-related financial markets and products in the market. Through these introductions we can almost see the inevitability of this crisis. After that, in this article, I deeply analyze the origin and the impact of the sub-prime crisis, and then come to the conclusion about the inspiration and a number of policy recommendations of China.