The Construction And Analysis Of Financial Crisis Precaution Indicators (Cases Of Comparative Analysis Of Financial Crisis)

After the collapse of Bretton Woods system in 1973, along with rapid economy globalization process, the frequency of international financial crisis has experienced an obvious rise after 1980s.Since the continually financial crisis affected the economic development and social welfare of both crisis countries and related countries, academy has been trying to build a precaution system to avoid them.Early after the Mexico financial crisis of 1994, there were scholars who started the research of financial crisis precaution system. After financial crisis of Southeast Asia in 1997, these research works quickly resulted in a series of representative precaution models. However, the global financial crisis triggered by the subprime loan defaulted the precaution system, which was based on the traditional theories of financial crisis. In consequence, research institutions and governments all over the world couldn't deal with the crisis properly, the market anticipation was promptly disturbed and the global financial and economic system experienced a heavy shock. Therefore, it's necessary to review the previous precaution system, research the reasons, characters and the infectivity and the development rules of the latest crisis. Based on these work we can build new crisis precaution system and further improve the advancing, accuracy and scientificity of the crisis precautions.Along with the increasing of China's trade dependency and financial opening, the crisis from overseas had a stronger impact on China's economy system. Furthermore, the subprime loan crisis happened in US made it more necessary to research, avoid and evaluate the financial crisis. This paper makes a historical review of the financial crisis occurred in Mexico, Japan, Southeast Asia and the subprime crisis in USA, analyzes the reasons and normal rules of crisis. Based on the previous precaution system and models and the comparative analysis of the former financial crisis, this paper raised 6 precaution indicators to constitute crisis precaution system, which include current account deficit/GDP, short-term debt/foreign reserve, non-performing loans/total asset, asset bubble, exchange rate fluctuate range, interest gap between home and abroad. Meanwhile, based on the current situation of China's economy and finance, this paper also made positive analysis of the 6 indicators and drew the conclusions that most indicators are in normal range except some risk in the real estate market and its potential influences of banking loans. And with the sound macro economy and improving banking system, China' potential financial risk and the probability of financial crisis are in a relatively low level.