Research On Credit Bubble And Financial Crisis

This paper analyzes the causes of the financial crisis from the point of view of the debt and bank credit. One of the most important arguments in this paper is that the uncontrolled rapid growth of lending is the ultimate reason behind such financial crisis. Meanwhile, as the major carrier of the credit growth, real estate becomes the utmost expression of the credit bubble. In history, almost every financial crisis was closely related to the real estate and credit bubble. In the beginning, this paper describes the historical background of the financial turbulence in2008. Secondly, it refers three countries:the United States, Iceland and Ireland to make sample analysis. Finally, it comes to a conclusion regarding the current economy situation in China and an overview of the potential financial risks and the measurements should be taken into consideration.