公司理财论文

Dongbei University of Finance & Economics Financial Tsunami 2008 By Chen Qing (20) (16:11:2011) Abstract In 2008, the global financial crisis erupted which is extremely serious.I t’s more serious than the great depression which is erupted in 1930s, it has a broad impact on global economy. And it is called "Financial Tsunami".In this paper, I will discuss the reason why the Financial Tsunami caused, how did we face with it, and what we can learn from the Financial Tsunami. We have to explore the reasonswhy the Financial Tsunami caused since the outbreak ofThe Financial Tsunamiand cause a lot of lose.Although having strong economic foundation,The United States has abig loss in this Financial Tsunami.The credit ratings of the lag of supervision and shortcomingswere exposed in the Financial Tsunami, and in this crisis we need reexamineproblemsin credit rating supervision.Throughthe adjustment to the credit rating supervision, we can regulate the behavior of credit rating agencies and promote credit ratings to play the role of preventing financial risk. The reason of the Financial Tsunami 2008 1.The subprime crisis is caused by the American real estate bubble. In recent years, Americans pay more and more money on estate because of the real estate prices rise constantly, monetary expansion and the environment of low interest rates make the borrowing costs lower.It is the reason why American people rushing into the real estate industry. Because of the American public optimistic expectations to house pricesin the future, banks sell housing loan to the hundreds of borrowerswhose credit quality are very low. When thegovernment adjust the monetary policy and the interest rate rise, the price of house slump,the foam also will die. The default rate of low credit class's rise sharply which has caused the subprime crisis. 2. With the intermediary agencies’help,large numbers of lenders transform the subprime housing loan to securities which are sold in the market and attract all kinds of investment institutions to purchase,after that, the investment institutions will transform it to a new financial product and sell to the insurance company. 3.Financial rating system had made a serious mistake .If there are some serious problems with financial products,the credit rating agencies will bethe only one that knows what the problem is. It is the business model of credit rating company that caused the financial crisis. The influence of the Financial Tsunami in 2008 Effect on America: America’s GDP growth of less than zero since 2007,house prices keep falling,and the consumer confidence was hit. Withunemployment rate rising and car sales decline,America is in thrift area now from consumption age. Effect on Britain: House prices fell sharply,the unemployment rate is highest in the past 17 months. The sales of cars have been declining constantly and industrial output have been down. Effect on France: The stock market was fall from 6000points to 3000 points,half of the market capitalization was lost. The Financial Tsunamihas been break up the France economy. Suchas the retail market, the automobile manufacturing industry, the real estate industry, construction and so on. Effect on German: The Financial Tsunami has impact some banks,but has not destroyedthe root of the financial system. The Financial Tsunami has made many index of economic fall rapidly, but hasn’tcause a great threat to people’s daily life. The Financial Tsunami has a bigger influence on export-oriented industry and less influence on domestic demand industry.On the other sides,it has a bigger influence in the western areas than eastern areas. Effect on China: The Financial Tsunamialso has a serious influence in china. The Financial Tsunami’s damage on China's financial system is not very serious, because our financial system is still more independent than other developed countries and developing countries.But the Financial Tsunamihas caused serious negative effect on the real economy in our country. The crisis led to economic growth slowed, greatly reduced in the labor position, and rising unemployment rate. For graduates,it’s more difficult to find a good job than before. How to deal with the Financial Tsunami The primary goal to deal with the Financial Tsunami is to restore confidence in the markets,before mid-November,2008,the plan of dealing with the crisis is purchasing bad assets of financial institutions by the governmentin America.The fed has injected more capital into market to cut interest rates in advance. The new measures of fed also encourage bank deposit excess reserve to get the money for interest, this plan will help the fed to get more control of interest rate and have more lever against the credit crisis. At the beginning, the countries of the European Union register capital to government organization, and make sure that depositor get away from lose. There are still quite a few countries stimulate the economy through the rate cut, tax-free way. Other countries are selling dollars to the market to support their own national currency .The British government will put 50 billion pounds into the market, and the bank will be part of nationalization which are trapped. The central banks of the global economy make the same decision: cut interest rates. October 8, 2008,the federal reserve, the European bank, China's central bank, the bank of England claim that cut benchmark interest rates. The fed, the ECB, the bank of England cut interest rates by 50 basis points,and China’scentral bank cuts interest by 27 basis points,and stop levy the interest tax. The capital will be injected in financial institutions and exchange for equity by the government,in order to solve the problem of insufficient capital. The expansion of domestic demand is the core of the positive financial policy goal, China currently has taken fiscal policy mainly includes: strengthening the government spending and cutting the tax structured,reducing or removing some project fee,increasing financial subsidies and transfer payment dynamics and stimulating consumption. China has decided to cut a large amount increased interest rate and improve the banking system liquidity. At the same time,banks increase the credit support of small and medium-size enterprise. The government has issued not only a series of measures to stimulate consumption and export but also the policy which are focus on the development of small and medium-sized enterprises. What can we learn from the Financial Tsunami 2008 We are impressed by the Financial Tsunami which is caused by subprime crisis.We should learn a lesson from it. 1.We should know and guard against mortgage market risk. The value of the property is always changing. Therefore,the banks need to have a rational choice between the risks and benefits to improve the ability of recognizing and resisting risk. 2.We shouldknow and guard against credit risks.the deflault rate of subprime loan is very high because the lending institutions is not adhere to the principle of “3C”.I n other words,the lending institutions didn’t have a risk assessment to borrowers based on “character””capability””collaterallt”.and we should strengthen the exa mine of borrowers’ loan ability,implement different risk pricing,lending standards to different credit risk lever of the borrowers to improve their ability of resisting the risk. 3.We should set up perfect information disclosure system and loan standard. Regulators should supervise the banks and the institutions who are engaged in the housing credit. In the marketing,the bank should disclosure all product information to the borrowers, make the borrowers know the products all sides and reduce the loss which are caused by information asymmetry. 4.We should establish the finance warning and monitoring system of real estate to improve the ability of resisting risk. Supervision department's duty is to improving the ability of identifying, forecasting, preventing and evading risks is the duty of supervision department.it is the time to establish finance warning of the real estate and monitoring system,it will have a positive impact on all of the banking system, the real estate market and the national economy sustainable development. Conclusion Although this financial crisis has basically concluded, but the harm it brings will affect the global economic development for a long time. Although the financial situation will be better in the future than before, the global economy will gradually picking up, the global economic growth may slow down. Reference