Research on the Collapse of US Investment Banks in the Subprime Mortgage Crisis

The subprime mortgage crisis was a famous financial event in history, which brought a huge impact to the US and even the world economy at that time, and the five major Wall Street banks suffered serious setbacks. In this paper, the failure of investment banks in the subprime mortgage crisis is attributed to the economic background, government policies and investment banks themselves, and the reasons for the failure of investment banks are summed up by synthesizing market mechanisms and policy requirements. Taking Morgan Stanley Bank as an example, through the analysis of its financial statement data, it discusses how investment banks deal with the crisis, and puts forward suggestions for the development of modern investment banks according to their operating conditions. This paper proposes that in the operation and development of modern investment banks, the investment banking business should be expanded, the innovation and control of financial products should be strengthened. Enterprises should strengthen the remuneration mechanism of senior managers and link the remuneration of senior managers with the long-term interests of the enterprise. The government should deepen the supervision and inspection of the financial market, and improve the legal system to restrict financial institutions and financial business as soon as possible.