Ｃｒｅａｔｉｎｇ　Ｆｉｎａｎｃｉａｌ　Ｈａｒｍｏｎｙ：Ｌｅｓｓｏｎｓ　ｆｏｒ　Ｃｈｉｎａ

The current tur-moil in globalfinancial nlar．ket s．whichbegan with the U.S. sub-prime mortgage crisis in2007, has shed a bad lighton market liberalism. Butit was the socialization of risk, not privatefree markets, that precipitated the crisis.Government sponsored enterprises (GSEs),not private enterprises, politicized invest-ment decisions and overextended credit bybuying up and guaranteeing subprime andother risky mortgages.