The Current Risk Analysis And Countermeasures Of Personal Housing Mortgage Loan In China

Real estate price in US reached the historical high level and began to drop after 17 times of raising the Federal Fund Rate to 5.25% by the Federal Reserve. Real estate market weakness and high level interest rate caused the "Sub- Prime Mortgage Crisis" break out in US in early 2007. "Sub- Prime Mortgage Crisis" broken out in the U.S. has affected global financial markets, resulted in substantial loss or even bankruptcy of many financial institutions. Preliminary estimate shows that, up to the end of April 2008, "Sub- Prime Mortgage Crisis" has caused direct losses of the global financial institutions more than 300 billion U.S. dollars, and the crisis continues. Since 2003, China's real estate market has achieved an unprecedented development, real estate investment rises quickly and property prices keep a double-digit annual growth. At the same time, to avoid the risk of comprehensive inflation led by the excess liquidity, People's Bank of China since 2004 has taken a series of tight-monetary policies such as raising the required reserve ratio and the benchmark interest rates, to reclaim the excess liquidity. With the continued effect of the policy appeared, China's real estate prices are going to be controlled, housing prices in some areas have even started to fall. At the same time, tightening of monetary policy has also led to insufficient liquidity in some small and medium-sized financial institutions. Although there is no in the strict sense of "Sub-Prime Mortgage" in China, but the excess prosperity in real estate market and rising market interest rates in the financial market are similar with the situation of U.S. before the "Sub-Prime Mortgage Crisis". Analysis of China's housing mortgage loan market security is of great significance to the safety of China's financial and economic system.Through the study of China's full history and developing status quo of housing mortgage loans, the thesis analyzed the credit risk, interest rate risk, operational risk, market risk and policy risk issues of individual housing mortgage loans of China's commercial banks, on basis of analysis of the fundamental reason and transmission mechanisms of the United States "Sub-Prime Mortgage Crisis". Models such as KMV model, JP Morgan's credit metrics model and Credit Suisse' additional credit risk model were introduced into the paper to analyze the credit risk in the housing mortgage market of China. Measures suitable for China's concrete situations were promoted, such as further improving the credit system, regulating banking operations, step by step financial innovations, strengthening financial supervisions and forecast of the real estate market. Particularly the idea of establishing the basic personal Account will be of definite value to the construction and raising efficiency of China's credit system.