Abstract

Since 2007, the effects of US sub-prime mortgage crisis are deepening further. The international conductive effect enlarges the global economic risk. World economic conditions tend to be more complicated. At present, the financial crisis is caused by borrowers defaulting contracts, which causes the depression of financial market. Financial crisis turns into a considerable issue in the world. Therefore, based on fully recognizing the importance of financial crisis, we can build a risk pre-warning mechanism to reduce financial crisis, avoiding more losses caused by financial crisis.

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