Research On International Transmission Mechanism Of Financial Crisis And Its Countermeasures

With the international financial liberalization, globalization of information network technology and innovative use of financial instruments, national economy is closely linked to each other. Financial crisis outbursts increasingly show packet occurrence. Great changes have taken place in transmission mechanism of financial crisis, especially in the transmission path and means of the financial crisis in2007, which is showing characteristics different from the past. Therefore, I believe, to generalize and research on the transmission mechanism of international financial crisis has important theoretical and practical significance. However, the current academic community still lacks detailed research results regarding this area. Existing researches on the financial crisis mainly focus on explaining the general causes of the crisis or concentrated study of certain cause and less on the transmission mechanism of financial crisis. Besides there are no studies of uniqueness of financial crisis in different periods. In addition, existing researches do not cover the new changes in the transmission mechanism of current financial crisis. Other than that, there are many concepts, which is likely to cause confusion. In view of this, this article studies the transmission mechanism of financial crisis in the context of globalization. The goal is to make new attempt in this area and provide some useful practical reference for decision-making.This article generally follows below approach:raise problems; generalize existing theories and summarize all transmission mechanisms; case analysis; countermeasures research. Basically these form a relatively complete framework of international transmission mechanism. In the writing process, this article will use a research method of combination of theory and practice. Firstly, study both traditional and contemporary theory of financial crisis, transfer rules, secondly, find out the performances and characteristics of the financial crisis through the in-depth analysis of modern practice. This article focuses on applying the theory into practice, analyzing specific events and trying to abstract general theory from the concrete events. Based on the studies of5financial crisis happened in last century and2007American subprime crisis, this article is trying to reveal the nature of outburst and transmission of financial crisis.This article is divided into six chapters. The first chapter introduces the background, significance and innovation of this article. The second chapter is literature review; this chapter will introduce domestic and international academic researches on the transmission mechanisms of financial crisis. Chapter III will be an overview of the financial crisis, which will lay down ground for studies in the later chapter. This chapter is based on current academic research results. First defining the concept of the financial crisis, then introducing the classification, characteristics and forms of financial crisis. Finally to briefly analyze financial crisis theory model in order to explain the formation mechanism of the financial crisis. The fourth chapter is the focus of this article, which, based previous studies, introduces the connotation of Financial Crisis, then make specific studies of various transmission channels, including the transmission channels of international trade and financial spillovers, international capital flows, the international debt conduction, monsoon effect, the net transmission mechanism (changes in market expectations). Chapter V are case studies of the transmission mechanism of modern financial crisis, using conclusions made earlier in this article, which is trying to explain conclusions more deeply and directly. Chapter VI, based on prevention enlightenments received from the studies of transmission mechanism of international financial crisis, linked to financial risks facing China’s open economy, will explore countermeasures of maintaining financial stability and preventing financial crisis on the background of increasingly outbursts and transmissions of frequent crises.