Abstract: The paper analyzes the important role preferred stock played in the 2008 US. financial crisis especially in assisting financial institutions. The paper studies the application value of the preferred stock for financial institutions in times of crisis. The paper summarizesa series of major initiatives the US. government took in the crisis to analyzethe application andapproaches of the preferred stock. It is found that preferred stock is the most frequently usedfinancial instruments in times of crisis. The paper suggests that preferred stock be used to quickly achieve the purpose of funding and stabilizing financial markets in crisis.China needs to establish a system of preferred stock in rescue period and the system should be constructed in times of both crisis and non-crisis.