The full name is "subprime mortgage crisis", a financial crisis triggered by the turmoil in the US subprime mortgage market. In August 2007, a storm triggered by the bankruptcy of subprime lending institutions, the forced closure of investment funds and the violent fluctuation of the stock market swept through the major global financial markets such as the United States, the European Union and Japan.

Continuous interest rate hikes set off a "time bomb"

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. A few years ago, when the housing market in the United States was highly prosperous, the subprime mortgage market developed rapidly, and even some borrowers who were usually considered unable to repay were given housing loans, which laid a hidden danger for the subsequent subprime mortgage market crisis.

In the two years up to June 2006, the Federal Reserve raised interest rates 65,438+07 times and raised the federal funds rate from 65,438+0% to 5.25%. The sharp rise in interest rates has increased the repayment burden of buyers. In addition, since the second quarter of last year, the US housing market has begun to cool down significantly. With the decline of house prices, it is difficult for buyers to sell their houses or obtain financing through mortgage loans. Affected by this, many borrowers in the subprime mortgage market can't repay their loans on time, and the crisis in the subprime mortgage market has begun to appear and become increasingly fierce.

Some European and American investment funds have been hit hard.

With the emergence of the subprime mortgage market crisis in the United States, some lending institutions engaged in subprime mortgage business bear the brunt of the impact. Since the beginning of this year, many subprime mortgage companies have suffered serious losses and even been forced to file for bankruptcy protection, including New Century Financial Company, the second largest subprime mortgage institution in the United States.

At the same time, because lenders usually package subprime mortgage contracts into financial investment products and sell them to investment funds, with the intensification of the crisis in the subprime mortgage market in the United States, some American and European investment funds that buy such investment products have also been hit hard.

Take Bear Stearns, the fifth largest investment bank in the United States, for example. Due to the crisis in the subprime mortgage market, two of its funds closed down recently, resulting in the total loss of investors exceeding $654.38+05 billion. In addition, BNP Paribas announced on the 9th that it would suspend the trading of its three funds involved in the US mortgage business. The market value of these three funds has shrunk from 2.075 billion euros on July 27th to 654.38+59.3 million euros on August 7th.

May affect global economic growth.

What's more, with the spread of the subprime mortgage crisis in the United States to other financial fields, banks generally choose to raise loan interest rates and reduce the number of loans, leading to the looming liquidity crisis in major financial markets around the world. On the 9th, after BNP Paribas announced that it would suspend the trading of its three funds, investors' worries about the credit market intensified, which led to a sharp drop in European and American stock markets. Among them, the average price index of Dow Jones 30 industrial stocks in new york stock market fell by 387. 18 points to 13270.68 points, a decrease of 2.83%.

Market analysts pointed out that if the crisis in the US subprime mortgage market further escalates and expands to more financial fields, it will lead to more violent turmoil in the global financial market. In addition, if the crisis affects personal consumption expenditure, the main driving force of American economic growth, it will have an adverse impact on American and even global economic growth.

The central banks of Europe, America and Japan responded urgently.

Facing the storm of American subprime mortgage market, the central banks of the United States, the euro zone and Japan are all taking active actions, hoping to restore investor confidence and maintain the stability of financial markets by providing huge funds to the money market. On August 9, the European Central Bank announced that it would provide 94.8 billion euros of funds to relevant banks. On August 10, the European Central Bank once again announced that it would inject 6 10 billion euros into the banking system of the euro zone to alleviate the liquidity shortage caused by the subprime mortgage crisis in the United States and stabilize the credit market. The Federal Reserve Bank of new york, a subsidiary of the Federal Reserve, injected $24 billion into the banking system on the 9th. 10 In August, the Bank of Japan announced that it would inject 1 trillion yen into the Japanese money market.

The subprime mortgage crisis in the United States is like a storm, which not only makes the Dow continue to dive, but also the three major European stock market indexes, Nikkei index and Hang Seng index have plummeted.

In order to prevent the crisis from spreading further, statistics show that in just 48 hours, central banks around the world have injected more than 320 billion US dollars for emergency "fire fighting".