Look Preventive Measures Of Financial Risks By The Transmission Mechanism Of The Financial Crisis

In2007, U.S. subprime mortgage crisis erupted. During a very short period, thecrisis spread to European developed countries, and eventually evolved into the globalfinancial crisis. This crisis impacted global economic in certain extent and turned outto be global financial turbulence and economic depression. In this days, with theglobalization of economy getting improved and financial markets getting closer, howto prevent financial crisis and risk infection is becoming more and more important.First of all, this paper makes a deep analysis of the cause for subprime mortgagecrisis and discusses the transmission mechanism of this crisis based on the causes.This paper also makes the statistical analysis of sequence data during the financialcrisis. It picked the stock index of Europa, U.S. and China (FTSE, DAX, S&P500and the Shanghai Composite Index) to make the empirical study of crisis transmissionmodel. After smoothing the selected sequence, use the financial econometric model toset a model. This paper uses ADF test, co-integration test and Granger causality test tostudy the transmission mechanism of international channel. Empirical results showthat American subprime mortgage crisis transmits to Europe through financialchannels, for the conduction of China spillover effect of trade and financial spilloversmainly secondary monsoon effect.In the other side, this paper analyses the economic policy of United States andEuropean Union, systematically discusses the policy measures to deal with suddenfinancial crisis by this countries and makes a brief evaluation of the effects of thesepolicy implementations. Based on the above evaluation, it reviews policies aiming atguarding against financial risk taken by China in the past, summarizes the financialrisk transmission mechanism and prevent experiences in other countries, makesevaluation of effectiveness of Chinese policy and provides the suggestions toguarding against financial risks. It concludes an important inspiration of effectivecontrolling financial risks, preventing and responding to the financial risks.