1. The concept of subprime mortgage crisis
2. What is subprime mortgage?
3. The causes of the subprime mortgage crisis
4. The outbreak of subprime mortgage crisis.
5. The development of subprime mortgage crisis
6. The impact of the subprime mortgage crisis
7. Lessons from the subprime mortgage crisis
8. Measures China should take in the face of American subprime mortgage crisis.
[Edit this paragraph] 1. The concept of subprime mortgage crisis
Subprime crisis, also known as subprime crisis, is also translated as subprime crisis. It refers to a storm caused by the bankruptcy of subprime mortgage institutions, the forced closure of investment funds and the violent shock of the stock market in the United States. It triggered an imminent liquidity crisis in major global financial markets. The "subprime mortgage crisis" in the United States began to appear gradually in the spring of 2006. In August 2007, it swept the major financial markets in the world, such as the United States, the European Union and Japan. The subprime mortgage crisis has become a global hot issue.
[Edit this paragraph] 2. What is subprime mortgage?
Subprime loan means "subprime mortgage loan", and "subprime" means that the poorly described party corresponds to "high" and "excellent". In the word "subprime mortgage crisis", it means low credit and low repayment ability.
Subprime mortgage is a high-risk and high-yield industry, which refers to the loans provided by some lending institutions to borrowers with poor credit and low income. Different from the traditional standard mortgage loan, the subprime mortgage loan does not require the lender's credit record and repayment ability, and the loan interest rate is correspondingly much higher than that of the general mortgage loan. People who are rejected by banks for high-quality mortgages due to poor credit records or weak repayment ability will apply for subprime mortgages to buy houses.
When house prices rise, the subprime mortgage business is also booming. Even if the lender's cash flow is not enough to repay the loan, they can get a second loan through property appreciation to make up for the gap. However, when the house price is flat or falling, there will be a funding gap and bad debts will be formed.
Subprime mortgage loan is a kind of foreign housing mortgage loan, which is lent to people with low income or personal credit history. The reason for lending to these people is that lending institutions can charge higher mortgage interest than mortgages with good credit ratings. When housing prices skyrocket, because the value of collateral is sufficient, the loan will not go wrong; When the house price falls, the value of collateral is no longer sufficient, and the mortgagor's income is not high, it will face the situation that the loan defaults and the house is repossessed by the bank, which will lead to the increase of bad debts of the mortgagor, the increase of bankruptcy cases of the mortgagor and the increase of systemic risks in the financial market.
[Edit this paragraph] 3. Causes of subprime mortgage crisis
The direct cause of the US subprime mortgage market storm is the rising interest rate in the United States and the continuous cooling of the housing market. Subprime mortgage refers to loans provided by some lending institutions to borrowers with poor credit and low income.
The rise in interest rates has led to an increase in repayment pressure. Many users with bad credit feel that repayment pressure is high and there is the possibility of default, which has an impact on the recovery of bank loans.
In the United States, loans are a very common phenomenon, from houses to cars, from credit cards to telephone bills, loans are everywhere. Locals rarely buy a house in full, usually with long-term loans. But we also know that unemployment and re-employment are very common phenomena here. How can these people with unstable income or no income buy a house? Because their credit ratings are not up to standard, they are defined as subprime lenders, referred to as subprime lenders.
Because the house price was high before, the bank thought that even if the loan was given to the sub-prime credit borrower, if the borrower could not repay the loan, he could use the mortgaged house to repay it and recover the bank loan after auction or sale. However, due to the sudden drop in house prices, the bank sold the house when the borrower was unable to repay it, only to find that the funds obtained could not make up for the loan+interest at that time, or even the loan amount itself, so the bank would lose money on this loan. Actually, the bank knows you can't pay it back. House prices have cooled down, on the other hand, raising interest rates is under their control)
It is ok for one borrower and two borrowers to have such problems, but due to the rising interest rate of installment payment and the fact that these borrowers themselves are subprime credit lenders, a large number of borrowers are unable to repay their loans. As mentioned above, the bank repossessed the house, but failed to sell it at a high price, which led to a large-scale loss and triggered the subprime mortgage crisis.
The American subprime mortgage market usually adopts a combination of fixed interest rate and floating interest rate, that is, buyers repay their loans at a fixed interest rate in the first few years after buying a house, and then at a floating interest rate.
In the five years before 2006, due to the continuous prosperity of the US housing market and the low interest rates in previous years, the US subprime mortgage market developed rapidly.
With the cooling of American housing market, especially the increase of short-term interest rate, the repayment rate of subprime mortgage has also risen sharply, and the repayment burden of buyers has greatly increased. At the same time, the continuous cooling of the housing market also makes it difficult for buyers to sell their houses or refinance through mortgaged houses. This situation directly leads to a large number of borrowers with subprime mortgage loans can not repay on time, which in turn leads to "subprime mortgage crisis".
[Edit this paragraph] 4. The outbreak of subprime mortgage crisis
On February 3, 2007, 13, New Century Finance issued a profit warning for the fourth quarter of 2006.
HSBC Holdings increased its bad debt reserve by $654.388+0.8 billion for its subprime mortgage business in the United States.
Facing the debt of $654.38+07.4 billion from Wall Street, New Century Financial Corp, the second largest subprime mortgage company in the United States, announced on April 2 that it filed for bankruptcy protection and laid off 54% of its employees.
On August 2nd, Societe Generale announced a profit warning, and later estimated a loss of 8.2 billion euros, because its Rhineland Fund with a scale of 654.38+0.27 billion euros and the bank itself participated in the US real estate subprime mortgage market a little, resulting in huge losses. The Bundesbank convened banks from all over the world to discuss a package plan to save the German Industrial Bank.
On August 6th, the American Mortgage Investment Corporation, the largest mortgage institution in the United States, formally filed for bankruptcy protection with the court, becoming another large mortgage institution in the United States after New Century Finance Corporation.
On August 8, Bear Stearns, the fifth largest investment bank in the United States, announced that its two funds had closed down, which was also due to the subprime mortgage crisis.
On August 9th, BNP Paribas, France's largest bank, announced the freezing of its three funds, which also suffered huge losses due to their investment in American subprime bonds. This move led to a sharp drop in European stock markets.
13 In August, Mizuho Group, the parent company of Mizuho Bank, Japan's second largest bank, announced that the US subprime mortgage-related losses were 600 million yen. Japanese and Korean banks suffered losses due to the US subprime mortgage crisis. According to the estimation of UBS Securities Japan, the nine major banks in Japan hold more than one trillion yen of US subprime mortgage-backed securities. In addition, five Korean banks, including Woori, invested 565 million US dollars in CDO. Investors are worried that the subprime mortgage problem in the United States will have a strong impact on the global financial market. However, Japanese analysts are convinced that most of collateralized debt obligation invested by Japanese banks have the highest credit rating, and the impact of the subprime mortgage crisis is limited.
Later, Citigroup also announced that the losses caused by subprime loans reached $700 million in July, but this is only a small amount for a financial group with an annual profit of $20 billion.
[Edit this paragraph] 5. The development of subprime mortgage crisis
In 2007
February 2007 13
The mortgage risk in the United States began to surface.
HSBC Holdings has increased its bad debt reserve by US$ 6,543.8+0.8 billion for its subprime mortgage business in the United States.
Countrywide Financial Corp, the largest subprime mortgage company in the United States, reduced its lending.
New Century Finance, the second largest subprime mortgage institution in the United States, issued a profit warning.
March 2007 13
In the new century, Finance announced that it was on the verge of bankruptcy.
US stocks plunged, with the Dow down 2%, S&P down 2.04% and Nasdaq down 2. 15%.
April 4(th), 2007
After cutting staff by half, New Century Financial Company applied for bankruptcy protection.
April 24(th), 2007
Existing home sales in the United States fell by 8.4% in March.
June 22(nd), 2007
U.S. stocks pulled back at a high level, with the Dow down 1.37%, S&P down 1.29% and Nasdaq down 1.07%.
July 2007 10
Standard & Poor's downgraded subprime bonds, and global financial markets fluctuated greatly.
July 2007 19
Bear Stearns's hedge fund is on the verge of collapse.
August 2007 1
Macquarie Bank said that investors in its two high-yield funds face a loss of 25%.
August 3(rd), 2007
Bear Stearns said that the US credit market is in the worst state in 20 years.
European and American stock markets plunged across the board
August 5(th), 2007
Warren spector, president of Bear Stearns, the fifth largest investment bank in the United States, resigned.
August 6(th), 2007
Real estate investment trust company, American Housing Mortgage Corporation filed for bankruptcy protection.
August 9(th), 2007
BNP Paribas, France's largest bank, announced its involvement in the US subprime mortgage, and most of the world's stock indexes fell.
Metal crude oil futures and spot gold prices plummeted.
August 2007 10
The US subprime mortgage crisis spread and the European Central Bank intervened.
August 2007
Central banks around the world injected more than $326.2 billion in 48 hours to save the market.
The Federal Reserve injected 38 billion dollars into banks three times a day to stabilize the stock market.
August 2007 14
Dozens of companies, such as Wal-Mart and The Home Depot, announced huge losses due to the subprime mortgage crisis.
The us stock market quickly fell to a multi-month low.
August 2007 14
The three central banks of the United States, Europe and Japan injected more than $72 billion to rescue the market again.
Asia-Pacific central bank recapitalizes the banking system.
The economy may delay raising interest rates.
August 2007 16
The share price of the largest commercial mortgage company in the United States plummeted and faced bankruptcy.
The US subprime mortgage crisis worsened, and the Asia-Pacific stock market suffered the biggest decline since 9 1 1.
August 2007
The Federal Reserve lowered the window discount rate by 50 basis points to 5.75%.
August 20(th), 2007
The Bank of Japan injected 1 trillion yen into the banking system again.
The European Central Bank plans to step up efforts to rescue the market.
August 2, 20071
The Bank of Japan once again injected 800 billion yen into the banking system.
Australia's central bank injected A $3.57 billion into the financial system.
August 22(nd), 2007
The Federal Reserve injected another $3.75 billion into the financial system.
The European Central Bank has increased its refinancing operation by 40 billion euros.
August 23(rd), 2007
The Bank of England lent 3140,000 pounds to commercial banks to cope with the crisis.
The Federal Reserve injected another $7 billion into the financial system.
August 28(th), 2007
The Federal Reserve injected another $9.5 billion into the financial system.
August 29(th), 2007
The Federal Reserve injected another $5.25 billion into the financial system.
August 30(th), 2007
The Federal Reserve injected another $654.38 billion into the financial system.
August 3, 20071
Bernanke said that the Fed will work hard to prevent the credit crisis from damaging economic development.
Bush promised that the government would take a package of measures to save the subprime mortgage crisis.
September 2007 1
British banks are suffering from a lack of cash.
September 4(th), 2007
The Bank for International Settlements and Standard & Poor's disagree on the severity of the subprime mortgage crisis.
September 2007
The Federal Reserve cut the federal funds rate by 50 basis points to 4.75%.
September 2, 20071
The run on Northern Rock Bank in Britain led to the defense of Central Bank Governor Kim and Chancellor of the Exchequer Darling.
September 25(th), 2007
The IMF pointed out that the subprime mortgage crisis in the United States has a far-reaching impact, but it also believes that governments should not over-regulate.
8 June 2007 10
The European Union held a two-day meeting of finance ministers, mainly discussing the slowdown of the US economy and the depreciation of the US dollar.
June 2007 10
In order to solve the subprime mortgage crisis, the US Treasury began to improve its regulatory structure.
June 65438+10/October 65438+March 2007
The US Treasury Department helped major financial institutions to set up a fund (super fund) worth $654.38+000 billion, which was used to buy mortgage securities in trouble.
23 June 2007 +65438
The American Bankruptcy Association announced that the number of consumers filing for bankruptcy in September increased by 23% year-on-year to nearly 69,000.
24 June 2007 10
Affected by the subprime mortgage crisis, Merrill Lynch, the world's top brokerage firm, announced a loss of $7.9 billion in the third quarter of 2007. The day before, Nomura Securities, Japan's largest brokerage, also announced a loss of $620 million in the quarter.
2007130 October 65438
Swiss bank, the largest asset in Europe, announced that its first quarterly loss in the past five years reached 830 million Swiss francs in the third quarter due to the loss of subprime-related assets.
200719 October
After nearly two months, Bank of America, Citibank and Morgan Stanley reached an agreement, agreeing to spend at least $75 billion to help the market out of the subprime mortgage crisis.
2007126 October
Bank of America began to lead Citigroup and JPMorgan Chase to raise $80 billion for Superfund.
2007128 October
Overall deterioration of housing market indicators in the United States.
According to the National Association of Realtors, in June, 5,438+10, the sales of existing homes fell for the eighth consecutive month, with an annual rate of 4.97 million, and the inventory of houses increased by 1.9% to 4.45 million.
In the third quarter, the S&P/ Shiller national house price index fell by 1.7% month-on-month, which was the biggest single-quarter decline in the history of the index of 2 1 year.
65438+February 4, 2007
Buffett, the investment giant, began to buy junk bonds issued by TXU, a Texas utility company, for more than $265,438 billion.
65438+February 6, 2007
The American Mortgage Bankers Association announced that the foreclosure rate climbed 0.78% in the third quarter.
65438+February 7, 2007
US President Bush decided to freeze some mortgage interest rates in the next five years.
65438+February 2007
The five central banks of the United States, Canada, Europe, Britain and Switzerland announced joint efforts to rescue the market, including short-term auctions and foreign exchange swaps.
65438+February 2007
In order to avoid selling cheaply, Citigroup incorporated SIV into its assets.
65438+February 2007
The European Central Bank guarantees to provide funds to financial institutions in the euro zone at a fixed interest rate.
65438+February 2007
The Federal Reserve submitted a package of reform measures to deal with the subprime mortgage crisis.
The European Central Bank announced an additional loan of about $500 billion to the euro zone banking system for two weeks.
65438+February 2007
The conventional bidding tools of the Federal Reserve injected $20 billion into the market in 28 days.
65438+February 2, 20071
Super fund manager BlackRock announced that there is no need to set up a super fund.
65438+February 24, 2007
Merrill Lynch, the Wall Street investment bank, announced three sale agreements to ease financial difficulties.
65438+February 28, 2007
Goldman Sachs, a Wall Street investment bank, predicts that Citigroup, JPMorgan Chase and Merrill Lynch may write down another $34 billion in subprime securities.
the year of 2008
65438+200814 October
According to the data of American Banking Association, the phenomenon of consumer credit default has intensified, and the overdue repayment rate has risen to the highest since 200 1.
65438+2008 10 month
Moody's, a rating company, predicts that SIV bondholders will lose 47% of their assets.
June 2008 65438+1October 65438+July
The subprime mortgage losses are serious, and Standard & Poor's rating company began to implement a new evaluation method for bond insurers.
The Bush administration intends to relax the supervision of Freddie Mac and Fannie Mae.
In February last year, the number of new housing starts in the United States decreased by 14.2%, with an annual rate of10.006 million, the lowest in 16 years.
20081October 2 1
The British Treasury asked private companies interested in buying Northern Rock Bank to submit detailed proposals before February 4th.
65438+2008122 October
The Federal Reserve cut interest rates by 75 basis points.
65438+2008124 October
The insurance regulatory authorities in new york, USA are trying to provide $654.38+0.5 billion in financial assistance to bond insurers.
65438+20081October 30th
Fed cuts interest rates by 50 basis points
February 2008 1
In June, the number of non-agricultural employees in the United States decreased by 1.8 million, the first decrease in more than four years.
February 9(th), 2008
The statement of the meeting of finance ministers and central bank governors of the Group of Seven pointed out that the impact of the subprime mortgage crisis has increased.
February 2008
In order to prevent foreclosure, the six major mortgage banks in the United States announced the "lifeline" plan.
Buffett is willing to provide reinsurance for 80 billion US municipal bonds.
February 2008 14
FGIC, the fourth largest bond insurer in the United States, announced its willingness to split its business.
February 2008 18
Britain decided to nationalize Northern Rock Bank.
February 2008 19
The Federal Reserve put forward a proposal to prevent high-risk mortgage loans, which is the most comprehensive remedy since the outbreak of the subprime mortgage crisis.
February 20th, 2008
Germany announced that state-owned banks were caught in the subprime mortgage crisis.
February 2, 20081
British Parliament approved the nationalization of Northern Rock Bank.
February 28(th), 2008
Ben Bernanke, chairman of the Federal Reserve, claimed to cut interest rates even if inflation accelerated.
March 5(th), 2008
ADP employment in the United States decreased by more than 20,000 in February, and the dollar hit a record low against the euro.