The Moral Hazard and Transmitting Crisis of Financial Institutions Under the Condition of Subprime Mortgage Securitization

Because the subprime mortgage securitization can successfully transfer the credit risk and provide conditions for financial institutions to relax the risk control,it results in an extremely serious moral hazard.The subprime mortgage securitization,the mark to market accounting of financial institutions and the asset liability management model based on Value at Risk induce the crisis transfer from credit market to capital markets,but the bursting of asset price bubble restrain consumer through the negative wealth effect,and impact on business investment through the Tobin Q effect and finance accelerator effect,making the crisis transfer from financial market to the real economy.