Analyses the Financial Crisis Based on Behavioral Finance Aspect

Abstract

As the tsunami,the financial crisis which is caused by the U.S.subprime mortgage crisis sweeps across the global financial markets.The modern financial model,which takes the traditional finance theory as its concept,must be blamed.As the challenges turn up in the traditional finance,its related theory of conception on the financial crisis lost its powerful persuasive once owned.Therefore,from the perspective of the behavior finance,this paper attempts to analyze the cause of the financial crisis and find out the reason that it spreads so quickly all over the markets,even causing the world economy into recession.Hopefully,this paper can have an enlightening effect on the preparedness and response to Chinese financial crisis.