The recent financial turmoil on Wall Street has intensified due to a series of factors that have gradually amplified and added fuel to the fire. Banks, investment banks, funds and insurance are all part of the U.S. financial capital chain. Now that banks and funds have suffered, insurance companies will be the focus of the next wave of crises. Because in order to obtain credit insurance, some fund investors contacted insurance companies, and the insurance companies bought some MBS (ie, mortgage-backed securities, etc.). Therefore, the hidden dangers of insurance companies have not yet been exposed.

The U.S. financial system is self-contained and spreads risks around the world. Therefore, after the subprime mortgage crisis, the world was in panic. However, the current problem with AIG is not a problem with its underwriting business, but a huge investment loss. Just like how much of AIG's exposure to the global insurance industry has not yet been exposed, this risk is not yet known, but it certainly exists.

Fortis announced on September 15 that it held 137 million euros in Lehman Brothers bonds, 270 million euros in reverse repurchase transactions, and 7 million euros in losses from CDS transactions. Affected by this, Fortis's stock price fell sharply. Ping An Insurance, on the other hand, purchased shares of the European Fortis Group and indirectly held Lehman Brothers bonds. Ping An Insurance lost more than 14 billion yuan on its investment, which had a great psychological impact on the market and Ping An's stock price plummeted.

However, the other two insurance companies did not "strike a mine." It is reported that among the current three A-share listed insurance companies, the China Insurance Regulatory Commission has only approved QDII quotas for China Life and Ping An, which were respectively 2% and 15% of the total assets of the corresponding companies at the end of the previous year. The reporter found that neither China Life nor China Pacific Insurance invested in bonds related to Lehman Brothers, AIG, and Merrill Lynch. The reason why China Pacific Insurance does not have a QDII quota is that the regulatory authorities originally planned to approve its investment quota after it completed its H-share listing.

In order to prevent the AIG crisis from happening again in China, the country should step up efforts to introduce deposit insurance, because deposit insurance is a reassurance. The most feared thing in a financial crisis is a bank run. It is impossible for any bank to keep all the deposits in its own hands and lend them out. If everyone goes to the bank to withdraw money, it will inevitably cause serious problems. The United States has long implemented an insurance system for depositors with less than 100,000 US dollars. Therefore, despite the severe financial crisis in the United States, banks have not been affected by runs.

The financial crisis has brought three major revelations

The U.S. subprime mortgage crisis has brought certain losses to Chinese banks that have already established a considerable scale of international business. Relevant people pointed out that due to the lag in my country's financial reform and the irrationality of the domestic market, financial innovation should slow down. Some even believe that stock index futures and margin trading should not be launched immediately.

Financial innovation must continue

It is reported that the capital adequacy ratio of general banks must be above 8%, equivalent to 12.5 times leverage, but the leverage of Wall Street investment banks has reached 30 times. This is Unprecedented. Merrill Lynch's leverage ratio soared from 15 times in 2003 to 28 times last year, Morgan Stanley's was 33 times, and Goldman Sachs's was 28 times. What does the unprecedented 30 times leverage mean? Earning 1% is equivalent to a return of 30% of equity capital, but when the risk comes, a loss of 3.3% means bankruptcy.

Risk management needs to be strengthened

Judging from the financial institutions that have collapsed or been merged this time, financial institutions, especially investment banks, are facing greater challenges in credit risk, market risk, liquidity risk and asset concentration risk. In terms of management, there are serious deficiencies in internal control. For Chinese and foreign financial institutions, it is necessary to improve the assessment of various risks; to have a set of strict risk management policies and procedures; to conduct stress tests on market risks and liquidity risks; to strengthen capital adequacy ratio management; to conduct various There should be a plan to deal with possible risks when they arise.