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growth is expected
« on: December 10, 2013, 06:13:46 am »
Against new waves of globalization
China is still weak financial avoid financial stress syndrome
Text / Outlook Newsweek reporter Yuan Yuan
Standing on Wall Street, you can feel the whole earth was shaking, just returned from New York back to China Academy of Social Sciences Institute of Finance Financial Markets Research Director Cao Honghui, severe turbulence on global financial markets deep feelings: the market does not uncertainties increase systemic risk increased, the international financial market has entered a turbulent era. The turbulence is not just the market ups and downs, it is the manifestation of the instability of the financial system turmoil in global financial markets has become the norm
The current international financial order is changing, and the international financial market turmoil has become the norm in the China Institute of Contemporary International Relations Research Center of Economic Security Director Jiang Yong seems that 2008 will be this turmoil was more obvious, because begins 2007 spring and summer the U.S. subprime mortgage crisis, an impact on the global financial markets in 2008 Cao Honghui been the biggest variables specific analysis First, because of the lack of transparency in transactions, the scale of the subprime crisis, the loss in the end how much depth does not bottomed out, nobody had a clue. Moreover, the crisis, including subprime loans, Subprime Lending based financial derivatives and in such derivatives transactions carried out on three levels, however, whether the United States has developed a number of financial institutions, financial derivatives, which involves large-scale multi- The transaction is still no way of knowing, systemic risk may still be released at any time professor of Tsinghua University, David this description, said: It's like a flood, like the negative news about the crisis always come in waves. The problem is that the crisis occurred after six months, we do not know how much harm it, and when the crisis 'big tail' will really exposed.
Secondly, the U.S. subprime mortgage crisis has exposed deficiencies in the system, and trigger a credit crisis. Cao Honghui that from a management point of view, as profit-driven, U.S. banks, various financial institutions in the lending process reduces the lender's credit review and the corresponding audit and risk management,ugg boots uk sale, which led to moral hazard in the entire market system . It is precisely because the entire chain are present on the phenomenon of lack of credit, so when most borrowers initial problems, the risk rapidly from subprime loans extended to the financial system, the market witnessed a series of chain reactions, almost swept the financial markets all component. The characteristics of the globalization of financial markets, and the crisis will put all the world's regions are brought in, no one is immune. As Harvard University economist Kenneth Rogoff warns: If the sharp decline in the U.S. economy, then everyone will be dragged into this whirlpool.
The third is in Europe and America and other countries is hard to determine the effectiveness of interventions. Since the outbreak of the crisis, Europe and other countries, the central bank has teamed intervention, through continuous injection to the market, lower interest rates, etc. trying to increase liquidity. However, liquidity index, the sharp rise in liquidity indicators now, we can see the essence of the crisis is not the lack of liquidity, but rather the lack of credit. Thus, by increasing mobility can solve the credit crisis,Ugg Australia, Western countries regulatory capacity, effectiveness and credibility of the measures are being questioned These features make the trend of the subprime crisis facing great uncertainty. Jiang Yong believes that the subprime mortgage crisis in July and August 2008, entered a new round of the peak, but because of the real estate cycle is seven to eight years, this calculation, the U.S. real estate market has gone through this cycle until five or six years the next two years will continue much time exposure affected, Cao Honghui that in 2008 the stability of the international financial system will be affected, will be in severe shock among this reason, the world's major institutions have lowered the United States for 2008 Japan and Europe and the emerging economies, growth is expected, predicted the United States, Japan and Europe is concentrated in about 2%; emerging market economies is also expected to become sluggish international financial landscape is changing
Depreciation of the dollar, the subprime crisis, the global stock market turmoil, financial futures volatility in crude oil prices soaring gold price fluctuations, etc., in the face of the financial turmoil, Jiang Yong, this shows that the international financial market is undergoing some subtle changes, and increasingly evident. As an economic power, financial weak, China must fully consider these changes to avoiding disadvantages First, the U.S. dominated international financial system is bound to be turbulent present, whether international financial order, rule, or major financial institutions, Financial market forces, the international monetary system are still American-led surge in the river, the U.S. dominated international financial system is bound to be volatile, it has no longer will provide a stable international financial markets quasi-public goods, stable international financial the market is not conducive to determine the dominance of the United States, nor can the U.S. financial capital to make money, Cao Honghui also believe that the US-dominated international monetary system is to make the global financial markets into turmoil deep roots: subprime crisis only for the existing financial markets systemic crisis was triggered off by this instability is institutional.
Since the Fed excessively loose monetary supply policy, making flooding of money supply, leading to global excess liquidity. This disguised continuous inflow of international capital caused the United States as an important incentive for the financial system shocks. And all kinds of financial innovation and the global financial market system over the use of financial leverage; international supervision, there are information asymmetries between the market, regulatory lag, lack of coordination mechanisms and other defects, the impact of Cao Honghui enlarge the risk that such existing unreasonable, unsound international monetary system have inherent flaws,ugg boots uk sale, which directly resulted in developed and emerging market countries, the instability of the financial system. This is not as accused Western countries rely solely on developing its own institutions, institutional reform can eliminate the second, the global economic and financial situation continues to depth of Yong Jiang told the reporter that in recent years, in the economic life of the financial position,Ugg Australia, role gradually improved, the economy increasingly high degree of monetization, which manifested as finance securitization, increasing the degree of electron, Globalization is the core of economic globalization, and the core of economic globalization is financial globalization, which is the accelerated economic globalization increasingly important manifestation of From a global perspective, today's capital flows over the past century than at any time in the large. According to the Federal Reserve Governor Frederic Komi even Kim said, since 1973, cross-border capital flows by the 5% of the global economy to 21%. Financial transactions between countries on the like a spider web, On the one hand, both for developed and emerging market countries, financial globalization has brought opportunities, improve market efficiency, and promote world economic growth and international trade development; but On the other hand, financial globalization has brought massive cross-border flows of speculative capital frequent fast, but also weakened the implementation of macroeconomic policies in some economies and the effectiveness of macroeconomic control, and are likely to cause systemic financial risks. With the Bank of France governor Christian Noyer's words, cross-border financial integration is the direct consequence is that local prices or liquidity shocks are more likely to have an impact on a global scale, far away events can bring a strong impact.
U.S. subprime mortgage crisis quickly swept the world as evidenced by its three international financial market forces are changing the discussion of this, analysts said Jiang Yong, entering the 21st century, the rise of a third share of financial strength, which is the emerging market forces. This force has two components, one oil-exporting countries, because oil prices occupy a lot of dollars, but have set up sovereign wealth funds; the other East Asian countries,Ugg Boots Sale, East Asia take full advantage of the opportunities in the international division of labor, variable comparative advantage a competitive advantage through trade surpluses accumulate huge foreign exchange reserves, have also recently set up a sovereign wealth fund the rise of a new international financial forces, the US-led international financial system constitutes a new challenge. Today, the tradition of the formation of the US-led financial sector, the European Financial Forum and emerging markets fierce collision between financial forum. It also contributed to the continuing turmoil in international financial markets one of the reasons. Expected that this unrest will continue in the future for a long time. And that is behind the world economic imbalances, therefore, Yong Jiang also called it the structural instability In addition, the overall excess liquidity and sudden liquidity crunch in international financial markets has also become a major threat to security, the mobility risk management more difficult.
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