Analysis On The Transmission Mechanism Of The European Debt Crisis

Existence of eurozone governments high deficit and high debt will enlarge therisk of European debt, at the same time transfer between eurozone countries to deepenthe European debt crisis through financial institutions and financial markets. Greeceinto the euro zone in the outbreak of the first Domino, other countries have followedsuit, the core countries of the euro zone credit is also reduced and possibility of debtrisk.In this paper, the debt problems of Greece as the breakthrough point, study theEuropean debt crisis in Europe especially conduction mechanism within the eurozone, pointed out that the bank business and financial market trading, close to theexpected deterioration played a large role in the conduction process of the debt crisis,especially in business transactions between the bank financial institutions, crossholding debt debt risk transfer between financial institutions around the world. At thesame time the eurozone financial market interdependence with the Europeaneconomic integration, strengthening and deepening of financial markets, derivativesinnovation also deepened the conduction debt crisis, especially the European debtcrisis in the swap credit default swap (CDS) will be the financial risk in the bondtransaction contract between the two sides and CDS transfer, deterioration of theEuropean market expectations, international speculators have stepped up to theEuropean financial market speculation, the debt crisis is gradually enlarged.The purpose of this paper is to study how to curb the debt crisis in Europe,especially the conduction of the euro zone, expanded from three aspects of trade,financial institutions and financial markets to control the debt risk in the euro area, prevent the European economy continues to deteriorate. On this basis that China is inthe European debt crisis of the enlightenment, that affect trade conduction of theChinese economy is the main, to have a negative impact on China’s export trade, andis thought to occur through the European debt crisis should be timely reflection onChina’s local debt risk, grasp the normality and regulate the local debt financing.