The Research On Bank Credit And Financial Risks Management Of Real Estate

In 2007,New Century Financial went bankrupt, and sub-loan crisis finally broke out in the United States. In this crisis,along with the bursting of real estate bubble, mortgage companies were in the verge of bankruptcy,and hedge funds were forced liquidation,and investment banks announced losses,all which triggered the U.S. and global financial markets turbulent. The U.S. real estate sub-loan crisis had once again let people see financial risks behind the excessive expansion of real estate.In recent years, along with unceasing advancement of the housing system reform in China, swift growth of the national economy and urbanization, China real estate industry presents a situation of high-speed development, which has gradually become a new growth point of national economy and consumptive hot spot. Along with rapid development of real estate finance, which is playing a pivotal role in the development of real estate industry, it has been an important strut of real estate industry development. However, the real estate industry was high risk business. The real estate finance inevitably undertakes the high risk of the real estate industry when it supports the rapid development of real estate industry. At the same time, due to the imbalance of China's economic structure and over-rapid growth of China's foreign trade surplus,banking system appears excess liquidity situation. Asset prices, represented by real estate, present a fast rising trend. The real estate prices of most cities appear a significant rise. The real estate prices of part of hot cities or regions even increase several times, so China appears a serious real estate bubble, and financial security of the real estate become a focus of concern. This paper explores deep-rooted relations between excess liquidity of the banking system and the real estate bubble, and explores deep-rooted relations between the real estate bubble and financial risks of the real estate. Taking Beijing, Shanghai, Tianjin ,Chongqing's real estate for example, this paper makes an empirical research to test that excessive support of bank credit is the important influencing factor which results in real estate bubble, and makes suggestions to promote the healthy development of real estate finance in China according to the experiences of U.S. sub-prime mortgage crisis.