2009•Journal of Sichuan University of Science & EngineeringRequires access
The Contagion Mechanism of the Subprime Mortgage Crisis and the Prevention of the Bank Crisis
Yang Hong-bin
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Abstract
The effect of the subprime mortgage crisis in America is continuing and analyzed from different points of view by researchers.This paper explores the roots of the crisis dispersion proceeding with the financial innovation.In the process of the asset securitization,the information asymmetry and the moral hazard induced by the securitization is the root of the subprime mortgage crisis,and the financial panic and the interest rate are important transmission channels.The banking should draw lessons from the crisis and strengthen the supervision on the financial innovation,and then prevent and control the bank crisis transmission by the improvement of the information disclosure,the financial supervision coordination mechanism and the risk-pricing mechanism.