The United States Sub-Loan Crisis on Commercial Bank Risk Management Implications

In April 2, 2007, the United States second subprime mortgage companies -- New Century Financial filed for bankruptcy protection, announced that 54% of its workforce. Since then, subprime mortgage crisis broke out, all the investment in commercial banks, investment banks, investment funds, mutual funds have spared in the American market, have affected.

The cause of the outbreak of the sub-prime crisis is mutiple level, including the external economic environment and policy environment, financial system, the defects of the system design, the derivative product development and sales of supervision, market and regulatory body's limited rationality.

From the internal management of the bank, the cause of the subprime mortgage crisis are as follows:

First, banks "launched - distribution" operation mode of asset securitization caused by excessive

"Launched - distribution" model is that the bank loans are not in balance sheet held to maturity, but to adopt a mode of operation for sale, securitization, the purchase of credit derivatives the means such as the credit risk of loans transferred out of the balance sheet. "Feature initiates distribute" mode includes the following four aspects. First, different from the traditional "launched - hold" loan business model, banks will no longer all loans are held to maturity, but all or part of the loan off balance sheet. Second, asset securitization is "a key pillar of initiates distribute" mode and the most common way. Through the "lending and loan sale and securitization packaging:" such a process, the United States commercial banks can loan sales in 6-9 months, provides funds for new loans. Third, from the source of profit point of view, in this mode, commercial banks revenue from loan service fees, transaction fees, interest, managed to advance owing on the loan a loan service income and fee income. From the profit structure, the bank non - interest income interest income rises, the relative decline. Fourth, in recent...