Study On Supreme Loan Crisis In The U.S. And Its Inspiration Of Mortgage-Backed Securitization In China

In March 2007, the U.S. second-largest subprime mortgage lender New Century Financial Corporation announced that they are in the brink of bankruptcy. On that occasion, the U.S. subprime mortgage crisis began. Later, the Standard and Poor's Composite Index reduced the subprime mortgage bond evaluation which make the financial market severe vibrated, and the sub-prime crisis broke out. Although the Federal Reserve and some central banks have injected, the harm of the crisis is still spreading to the global markets. As a result, the global financial markets were struck badly. As the collapse of Fannie Mae, Freddie Mac in September 2008, and the bankruptcy of Lehman Brothers happened continuely, the subprime crisis evolved into the most serious financial crisis after the financial crisis in 1929. Subsequently, the impact of crisis on the real economy is also gradually becoming apparent. Regard to the causes and effects of the sub-prime crisis, many scholars have analyzed and studied profoundly. Although many of them are valuable, the study on the development of Mortgage market in China is still not penetrated. At present, while the Chinese mortgage market is in a leap-forward development of the stage, the derivatives and financial innovation are still in the beginning stage. The deepening analysis on essential causes of the U.S. subprime mortgage crisis and the summarize of the lessons we've learned in it will make a important pratical significance to our development of domestic-related business.First of all, in the first chapter, subprime loans and a relevant theory of securitization are summarized, mainly in the definition, the classification, and development background of the subprime loans. As for the securitization, the objectives, the theory, the characters and the participants are emphasized in order to know about the subprime mortgage crisis in America. What's more, the data analysis of the U.S. subprime mortgage market and the analysis of the development and the scale of the subprime market are presented. This part is the theory of the article.In chapter two, the birth and the evolvement of the US subprime mortgage crisis are reviewed. Under the U.S. financial system, with the sub-prime marketa to a certain scale, subprime crisis were happened. The U.S. macro-economic policies, particularly monetary policy adjustment are the reasons of the crisis which was the result of accumulated risk. After the crisis, the crisis quickly transferred. The sub-prime sector, investors, commercial banks and other financial institutions were attacked in different degrees in the crisis. As a result, the U.S. financial market were shocked greatly.In chapter three, the reasons for the United States subprime mortgage crisis causes are summarized. There are four main causes here, the excessive monetary policy, the transition of the sub-prime mortgage securitization, an over-reliance on credit rating agencies, the lack of U.S. government supervise. The deepening analysis of the causes of the subprime mortgage crisis proposes a basic theory for the revelation to the mortgage securitization in China in chapter five.In the fourth chapter, the effects to the US of the sub-prime crisis from four aspects, the real estate industry, U.S. financial markets, national income and economic entities. At the same tine, the effect to China are presented here from financial institutions, stock market, export, and macro-economic policy. This chapter will let us know the greatest shock that the sub-prime crisis brings.In chapter five, the enlightenment of the U.S. subprime mortgage crisis to China's development is narrated in details. Firstly, the description of China's housing mortgage market, the comparing of the U.S. sub-prime market and China's to ensure that they are quite different are showed and the six risk points of China's housing mortgage loans are pointed out too. Then the development of China's mortgage securitization are reviewed, and it's necessary for financial institutions to do well in the derivative products innovation and technology developments. Finally, the deepening research of the US subprime mortgage crisis has an important revelation to the development of China's housing mortgage. There are four things we can do to ensure the healthy development of China's housing mortgage loans and securitization, to grasp the housing mortgage risk, to enhance the completeness of the securitization financial system, to pay attention to credit system building, and to make the legal system of mortgage perfect.