Empirical analysis on the financial fragility of the United States based on factor analysis method

Based on financial data from 1997 to 2008 of the United States, this paper selected 15 relative indicators to valuate financial fragility of the United States by using the factor analysis method. The result shows that the financial fragility of the United States has getting worse from 2002. By 2007, it has been very serious. Among the factors which have effected on the financial fragility of the United States, the most determining factor is the domestic macro-economic environment, then the domestic financial development level. The paper explained the explosion of the US sub-prime crisis from the perspective of the financial fragility.