Many will recall that we treat this current problem a lot earlier. Let's do it again, because topicality is not reduced.
Meanwhile a large number of studies have shown that things are a little different than at the beginning of the global economic crisis thinking: inconsistency of national and incompleteness and inconsistency of the global financial system, was the trigger role in the outbreak of the global economic crisis, but the underlying generetor, the driving force were global imalances and their generators.
It seems that it may be useful to emphasize to point out that the former Great Depression predominantly in the U.S. and today's global economic crisis has had a large and important common feature in the financial domain.
At least with the current global economic crisis is concerned, it seems that we come to the conclusion that it may be correct causality following formula: the role of the financial system in causing the crisis was important but not primary / fundamental. This also means that it is necessary but not sufficient to establish, a consistent set of financial systems - both national and global. It is necessary to remove the deeper generators disorders not only in financial but also in the real sector of the economy:
- As we know the Great Depression in the U.S. had a significant impact on the establishment of a repressive, hiperegulated Financial Sector (or as others prefer to tell the Government-led financial system);
- Performance of that repressive sector became an obstacle financial development,
- But when we take account other factors (computer and telecommunication technologies, financial innovation, the general surge of liberalization and the recent breakthroughs in financial theory) has inevitably been apperance a "financial revolution" in the second half of the seventies and eighties years of the last century;
- Financial revolution is, in fact, had two "arm scissors" jointly participated in the simultaneous realization of two-dimensional process of creative destruction:
(1) the destruction of the previous system of financial repression, and
(2) creating a new, much more developed, far more liberal, etc. and risky World of finance.
Financial development/"Financial revolution", viewed as trade of too much libelarism - to much riskiness
Table of Contents
1. There can be no stable world of finance based on the premises: poor regulation, strong liberalization and high riskiness
2. Financial development/"Financial revolution", viewed as trade of too much libelarism - to much riskiness
3. Selected periods of financial instability since 1970
4. Global syllogism of financial instability
Objectives and Themes
The work examines the causality behind global financial crises, arguing that the shift from regulated financial systems toward extreme liberalization and creative destruction has fundamentally increased systemic risk. It explores how the lack of a consistent global financial oversight mechanism, coupled with the rapid growth of complex financial instruments, has rendered the world economy more volatile and susceptible to crises.
- The historical evolution from repressive financial systems to neo-liberal, deregulated markets.
- The role of the "financial revolution" in fostering both development and systemic instability.
- The contradiction between nationalized, complex financial systems and the absence of a global regulatory authority.
- The impact of global financial imbalances and the "syllogism" of instability in the modern economy.
Excerpt from the Book
Financial development/"Financial revolution", viewed as trade of too much libelarism - to much riskiness
From the point of seeking an optimal relationship liberality and risk, financial development (financial revolution) can be sketched in short as follows:
- Financial revolution has resulted in strong increases in financial development, higher than that realized in the real sector (production and trade), which is of course desirable and progressive,
- However, the financial revolution in many ways led to adverse implications, ie. such institutional, instrumental and functional characteristics, which meant a big increase in risk in a globalized world (because the globalization of the real sector of economy, production and trade, already achieved),
- Numerous innovations were in the types and structure of financial instruments, banking and other financial services industry, which meant that the "financial products and services" and thus their manufacturers, more complex, more difficult to monitor, review and supervision;
- Also, the financial revolution has led to dramatic changes in the institutional framework, in the domain of types and structure of financial institutions and their mutual connection is primarily functional, even merge, and organizational connections with non-financial organizations;
- Especially the big changes came to the fore banking: relativisaton, smear or simply disavowal previous regulations (built up since the Great Depresion and after World War II), the financial revolution has fundamentally changed the physiognomy of the banking sector;
Summary of Chapters
There can be no stable world of finance based on the premises: poor regulation, strong liberalization and high riskiness: This chapter analyzes the trigger role of financial system inconsistencies in global crises, contrasting current conditions with the Great Depression.
Financial development/"Financial revolution", viewed as trade of too much libelarism - to much riskiness: This section details how the financial revolution altered institutional frameworks and increased systemic risk through deregulation and complex financial innovation.
Selected periods of financial instability since 1970: This chapter provides a chronological overview of historical financial crises, illustrating the shift toward more frequent systemic instability in an interconnected world.
Global syllogism of financial instability: The concluding section synthesizes the argument, proposing that the combination of massive global funds and the lack of a unified regulatory system inevitably leads to financial imbalances.
Keywords
Financial revolution, deregulation, liberalization, global financial crisis, systemic risk, financial instruments, banking sector, economic imbalances, neo-liberalism, financial stability, capital markets, monetary instability, financial repression, institutional framework, global economy.
Frequently Asked Questions
What is the core focus of this research?
The work focuses on the inherent instability of the modern global financial system, which the author argues is caused by an over-reliance on liberalization and a lack of robust international regulation.
What are the primary themes discussed?
Central themes include the "financial revolution," the transition from repressive to neo-liberal financial systems, the impact of technological advancement on financial complexity, and the cyclical nature of financial crises.
What is the primary goal of the author?
The primary goal is to demonstrate that the current global financial crisis is a direct consequence of systemic premises—namely, huge operational funds paired with the absence of a consistent global financial oversight authority.
Which scientific approach is utilized in this paper?
The author utilizes a diagnostic and analytical approach, combining historical comparison (such as the Great Depression) with current data on financial instability to develop a logical "syllogism" of the causes of financial crises.
What is covered in the main body of the text?
The text covers the evolution of financial systems, the emergence of "financial scissors" (destruction of old repression vs. creation of new, risky finance), and an extensive historical list of financial instabilities since 1970.
Which keywords best characterize this work?
The work is best defined by terms such as financial revolution, systemic risk, deregulation, global financial crisis, and institutional inconsistency.
How does the author define the "financial revolution"?
The author defines it as the period in the late 20th century characterized by rapid financial development, technological integration, and the deregulation of financial sectors, which ultimately led to a more complex and risk-prone global finance environment.
What does the "global syllogism" refer to in the text?
It refers to the author's logical deduction: because there are massive global funds operating in the absence of a consistent global financial system, financial imbalances and subsequent crises become inevitable.
Does the author suggest a return to past regulations?
Not exactly; the author argues that while the system of "financial repression" is not the solution, there is an urgent need for an effective system of global financial management to regulate the globalized economy.
- Quote paper
- Stanko Radmilovic (Author), 2012, No stable world of finance based on the premises. poor regulation, strong liberalization and high riskiness, Munich, GRIN Verlag, https://www.grin.com/document/267119
