国际化管理-什么是全球金融危机，谁是危机？

1.0 Introduction介绍
 

自20世纪30年代以来，全球金融危机爆发以来最为严重，它对各方面的影响，2008年并带来重大损失。分析什么是全球金融危机，谁是危机，具有重要的现实意义。The global financial crisis broke out in 2008 was most serious since the 1930s, it deeply affected various aspects and brought significant losses. Analyzing what is the global financial crisis, and who it is the crisis for has a important practical significance.

2.0 Causes案例
 

全球金融危机爆发的原因体现在以下几个方面。Reasons for the outbreak of the global financial crisis are reflected in the following aspects. 

2.1 Real estate bubble 2.1房地产泡沫

最终由美国次贷危机中的2008来自于房地产泡沫破灭所引发的全球金融危机，以及房地产泡沫的诞生不仅关系到“消费文化”的美国社会，也直接与不当的房地产金融政策，以及在美国的货币扩张和低利率环境降低借贷成本长期维持宽松货币环境，促使美国民众涌入房地产领域。当经济周期性衰退开始，利率上升，房价下跌，泡沫破灭，低信用首先类违约率明显增加，从而导致次贷危机（克罗蒂，2009）。

The global financial crisis ultimately triggered by the U.S. subprime crisis arising from the burst of the real estate bubble in 2008, and the birth of the real estate bubble is not only related to the "consumption culture" of American society, but also directly connected with the improper real estate and financial policies, as well as the long-term maintenance of accommodative monetary environment in the U.S. Monetary expansion and low interest rate environment reduce borrowing costs, prompting American people to swarm into the real estate field. When cyclical downturn of the economy began, interest rate increased, house prices fell, the bubble was shattered, default rates of low credit class first of all increased significantly, which led to the subprime crisis (Crotty, 2009).

2.2 Defects in financial regulation

Before eruption of the crisis, there are nearly 10 departments or organizations which are in charge of financial regulation, including the federal and state governments, the Federal Reserve Board (FRB), Office of Comptroller of Currency (OCC), Office of Thrift Supervision (OTS), Federal Deposit Insurance Corporation (FDIC), Securities and Exchange Commission (SEC), and so on. Admittedly, the regulatory regime was a solid foundation for the development and prosperity of the American financial industry. However, with the development of financial globalization and financial innovation, the drawbacks of the U.S. financial regulatory system gradually reflected, and eventually became one of the causes of the financial crisis. Firstly, the most prominent drawback is that there are too many regulatory systems and agencies in the U.S., their authorities overlap mutually, resulting in a blind spot in monitoring. For example, considering financial derivative products such as Collateralized Debt Obligation (CDO), Credit Default Swap (CDS), it is not definite about whether it is FRB, OTS or SEC, which should in the end manage them. Secondly, various regulatory principles are developed fine increasingly, in ensuring the accuracy of the regulatory supervision, it is at the expense of efficiency, the speed of response to market changes becomes more and more slow. Finally, there are too many regulatory systems, making there is no institution with sufficient legal authority to be responsible for the risk of the entire financial market and financial system, the best timing of regulatory is often lost because of waiting for the approval or meetings (Milberg, 2009).

2.3 Excessive innovation

This global financial crisis caused by securitization of the U.S. subprime mortgage credit debt, Fannie Mae, Freddie Mac were through asset securitization to issue bonds in the market to attract investment banks and other financial institutions to buy. Investment banks reused financial engineering techniques to sell the bonds. After this series of innovations, it covered up the huge risk of financial derivatives, more and more investors in the U.S. and overseas were involved in the purchase. The risk of the U.S. real estate bubble spread to the globe with the financial derivatives, and finally the U.S. subprime mortgage crisis spread to the world to form a global financial crisis (Barrell, Hurst and Kirby, 2008).

2.4 Defects in credit rating system 

Objectivity and impartiality of credit rating agencies directly affect the safety of the financial risk early warning system and the whole credit system. The U.S. credit rating companies’ revenue are from the rating targets, this conflict of interest can not let the rating agencies to be objective, impartial, and therefore the credit system has significant flaws (Boyer, 2012). In the subprime crisis, many investors purchased high-risk financial derivatives that they did not understand but rating companies gave a high rating, thereby suffering heavy losses.

3.0 Who the crisis is for危机了谁

The following contents analyze who the crisis is for, including the personnel engaged in financial sector and international trade, as well as ordinary families. 

3.1 Financial industry practitioners 

The financial crisis first of all hit the U.S. banking system. There are a large number of state banks, small and middle-sized banks in the U.S. These banks invested in a lot of subprime-mortgage financial products and other securitized products in the past few years. After the outbreak of the subprime crisis, they suffered a lot of write down debts and losses. These small and middle-sized banks’ ability to withstand the crisis is poor, it is difficult for them to get the U.S. government's bailout, thus they have no choice but went bankrupt, lots of people engaged in the financial industry were unemployed (Subacchi, 2008). 

3.2 International trade practitioners

In recent years, emerging market economies rose rapidly mainly by expanding exports, trade with the U.S. and Europe has become an important pulling power in supporting their economic growth. After the financial crisis, the United States and Europe slowed domestic demand, which would inevitably lead to decline in global commodity trade. It heavily hit the exports and economic growth of countries of emerging markets, a large number of manufacturing and foreign trade personnel were facing unemployment and the reduction in income (Jing, 2012). 

3.3 Ordinary families

Outbreak of the financial crisis made members of many families face unemployment, the employment situation has become grim, there was a substantial increase in the unemployed population (Gezici, 2010). The financial crisis has led to shrinking personal property, their securities, stocks or other financial products became worthless. Many families had to reduce investment and consumption, delay retirement age, and in order to deal with the financial crisis, the government issued a large number of bonds, money, which caused global inflation and increased cost of living. Especially for low-income women, it was harder for them to accumulate household wealth than in the past (Montgomerie and Young. 2011).

4.0 Conclusion总结
 

The financial crisis was related to the real estate bubble, excessive innovation of financial products, the lack of financial regulation and flawed credit rating system. Outbreak of the financial crisis has a very negative impact on personnel dealt with financial service and international trade, as well as for ordinary families.

 

References文献
 

Barrell, R., Hurst, I. and Kirby, S. (2008). Financial crises, regulation and growth. National Institute Economic Review, 10(206), 56 - 65.

Boyer, R. (2012). The four fallacies of contemporary austerity policies: the lost Keynesian legacy. Cambridge Journal of Economics, 36, 283 - 312.

Crotty, J. (2009). Structural causes of the global financial crisis: a critical assessment of the ‘new financial architecture’. Cambridge Journal of Economics, 33, 563 - 580. 

Gezici, A. (2010). Distributional consequences of financial crises: evidence from recent crises. Review of Radical Political Economics, 42, 373 - 380.

Jing, R. (2012). The collapse speed of China's exports in the 2008-2009 financial crisis. CESifo Economic Studies, 12(58), 650 - 670. 

Milberg, W. (2009). Shifting sources and uses of profits: sustaining US financialization with global value chains. Economy and Society, 37(3),420 – 451.

Montgomerie, J. and Young, B. (2011). Home is where the hardship is. Gender and wealth (Dis) accumulation in the subprime boom. CRESC Working Papers, 79, 2 -19.

Subacchi, P. (2008). New power centres and new power brokers: are they shaping a new economic order? International Affairs, 84 (3), 485 - 498.