Research For The Reason Of Subprime Crisis Based On The Information Asymmetry

In 2007, the U.S. subprime mortgage crisis has triggered a rare storm in the financial markets. It causes a certain degree of impact to the world's major economies. Both the economic prospects of the developed countries and the developing countries go downhill quickly. Therefore, in-depth exploration on the causes of the U.S. subprime mortgage crisis is meaningful. It not only be conducive to the policy responses to the current subprime crisis, but also have more important theoretical and practical guiding significance for treating the risk accumulation rationally and prudently, strengthening risk prevention awareness, improving risk prevention ability when we develop the mortgage markets.The main source of risk of the U.S. sub-prime crisis is "sub-prime borrowers". then as to the occurrence of the sub-prime crisis, what implications do the process of the subprime mortgages which is directly related with sub-borrowers have? At the same time, who does the sub-borrower's credit risk transmit through the sub-prime chain down to a "domino effect" on it? This paper attempts solve those mysteries from the perspective of asymmetric information, being based on the theory of information economics. First of all, this article will analyze the U.S. subprime mortgage securitization process, and then decompose the chain-style of the subprime, research the asymmetric information problem of various components of the subprime market, combining with the different functions of the sub-prime market components. Secondly, this paper will use empirical research method, cite models to analyze the two key points of the subprime market:one is the information asymmetries between the sub-borrowers and lenders, the other is principal-agent problem of the sub-prime chain. Finally, the paper will combine the real development situation of the Chinese mortgage market, learn experience and lessons from the development of the U.S. sub-prime market, put forward some helpful proposals to develop and improve China's housing mortgage loan market.The article includes five parts, as follows: ChapterⅠ:IntroductionThe part mainly introduces the purpose and background of writing, literature review, the research methods used in paper and innovation points.ChapterⅡ:An overview of the U.S. subprime mortgage crisis.Focus on expounding background, development and influence of the U.S. sub-prime crisis, the important role of market participants.ChapterⅢ:Analysis of the cause of the subprime crisis based on the information asymmetry.From a beginning analysis of the function of market joints, asymmetric information problem between the main bodies concretely. Analyze the information missing issues of the subprime market, and on this basis to analyze the risks arising from those asymmetric information problems.ChapterⅣ:Model analysis of asymmetric information of the sub-prime crisis.It mainly use simplified models to analyze the of the information asymmetry problem of the source risk——"subprime mortgages," and the principal-agent problems which play an important role in the risk proliferation and transferring in the subprime market.ChapterⅤ:The inspirations of the U.S. subprime mortgage crisis to China. Mainly combine the real development situation of the Chinese mortgage market, learn experience and lessons from the development of the U.S. sub-prime market, put forward some helpful proposals to develop and improve China's housing mortgage loan market.