The initial liquidity crisis can be considered to be caused by the early subprime mortgage crisis. Northern Rock Bank is one of the first targets. This is the First Bank of England. The bank can't borrow more money to repay the debts due in mid-September 2007. Due to the lack of continuous cash injection, its highly leveraged business could not be supported, which eventually led to its takeover and formed early signs of disaster that would soon befall other banks and financial institutions. Excessive borrowing under loose signature tolerance standards is one of the characteristics of American mortgage bubble. The flood of credit has led to a large number of subprime mortgages (subprime loans), and investors believe that these high-risk loans will be alleviated through asset securitization. Since 1989, the yields of MBS issued by Fannie Mae, Freddie Mac and Geely Mae in the United States have been higher than the yields of US 10-year bonds 137 basis points on average, which has attracted many legal persons to invest. Lehman Brothers' MBS index shows that it has been a positive return for ten consecutive years since 1996, and the worst return rate of 1999 is 2. 1%, while the MSCI global bond index was negative in 1999, 200 1 and 2005. This strategy seems to expand and spread through the domino effect. The damage caused by the failed asset securitization plan swept the housing market and its enterprises, and then triggered the subprime credit crisis. The crisis caused more banks to sell major silver plates in the market. These excessive houses have greatly reduced the surrounding housing prices, which are easy to be taken back by the court for auction or abandoned. This result laid the groundwork for the future financial crisis. Initially, the affected companies were limited to those directly involved in housing construction and subprime loans, such as Northern Rock Bank and National Financial Services Corporation. Some financial institutions engaged in mortgage securitization, such as Bear Stearns, have become victims. In July 2008 1 1, the largest company in America went bankrupt. Due to the continuous decline in house prices and the rising foreclosure rate, the assets of IndyMac Bank were seized by federal agents after being crushed by the pressure of credit crunch. On that day, the financial market fell sharply because investors doubted whether the government would try to save the mortgage institutions Fannie Mae and Freddie Mac. September 7, 2008, late summer. Although the federal government took over Fannie Mae and Freddie Mac, the crisis continued to intensify. Then, the crisis began to affect ordinary credit unrelated to real estate, and then affected large financial institutions not directly related to mortgage loans. Most of the assets owned by these institutions are obtained from the income related to housing mortgage loans. These securities with credit loans as the main target, or credit derivatives, were originally used to protect these financial institutions from bankruptcy risks. However, due to the subprime mortgage crisis, the number of members affected by these credit derivatives has increased, including Lehman Brothers, American International Group, Merrill Lynch and HBOS. Other companies began to face pressure, including Washington Mutual, the largest deposit and loan company in the United States, and affected Morgan Stanley and Goldman Sachs.