What kind of scientific research dominate in the field of global financial crisis?
In my opinion, globalization is leading to the Integration of Business Cycles.
In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008.
At that time bankruptcy was announced by one of the largest investment banks in the world.
As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated.
It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years these processes continue.
(The continuation of these considerations can be found in the comments below).
Do you agree with my opinion?
Please reply
I conduct research in key aspects of this issue. The results of these tests are described in the following publications:
Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...
Article A safe monetary central banking policy as a significant inst...
Article Anti-crisis state intervention and created in media images o...
Article Soft monetary central banking policy and Plan for Responsibl...
I invite you to discussion and cooperation.
Best wishes
Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.
Please reply. I invite you to the discussion
The above question inspired me to the following considerations:
Do you think that public debt is 50% to the Gross Domestic Product generates high or low risk of indebtedness of the country?
In many countries formal rules have been adopted or guidelines have been included in key national legal regulations according to which public debt in the amount of 50%. Gross Domestic Product is interpreted as not generating high risk of domestic debt.
However, in some countries, the public debt in relation to Gross Domestic Product for many years has been at a level well above 100%.
Among these countries are developing countries but also large, rich developed countries.
On the other hand, if such countries are increasingly global, systemic credit risk may grow and if another global financial crisis similar to the one in 2008 could emerge in the future, it could turn into a serious global debt crisis.
Therefore, let me ask you: Do you think that public debt is 50% to the Gross Domestic Product generates high or low risk of indebtedness of the country?
Please, answer, comments. I invite you to the discussion.
Will further mergers and acquisitions in the investment banking sector increase the credit systemic risk in the economies?
The process of credit risk management improvement is implemented mainly at the level of a specific commercial bank.
Central and supervisory institutions, which include mainly central banking and banking supervision institutions, may affect some aspects of this process, correct possible excessive levels of systemic credit risk, especially when a specific bank reliably implements prudential procedures in the scope of lending or in an aggravating situation the quality of the loan portfolio caused by the downturn in the domestic and possibly global economy.
Before the emergence of the global financial crisis in autumn 2008, there was an unwritten rule in some financial circles that a large banking entity could not fail.
The declaration of bankruptcy by jeen from the largest investment banks Lehman Brothers, from which the bankruptcy will begin the global financial crisis, questioned this type of opinion referring to entities of the financial system.
Since 2008, in the period of the past decade, another spectacular major mergers and acquisitions took place in the sector of commercial financial institutions, including some of the largest banks globally.
If the supervisory and central bodies of financial systems consent to this type of transaction, is it possible to assume that central banking and banking supervision institutions of particular countries are of the opinion that this is irrelevant to the potential increase in systemic credit risk and thus the risk of emergence in the future, the next and perhaps even more negative effects of the global financial crisis?
What if one of the largest banking entities on the global scale in the future would announce a permanent loss of liquidity?
Do the central banks that are accepting this state already have prepared prudential and rescue instruments, including, for example, counted in many billion USD or Euro rescue stabilization funds in the event of the emergence of the next global financial crisis?
These financial stabilization funds are reportedly already prepared, but can a potentially larger global financial crisis than the previous one in 2008 be effectively controlled thanks in principle only to these stabilization funds?
In addition, if central banking suggests to commercial banks, including investment banks operating on capital markets, that in the event of a financial crisis will help to eliminate the potential risk of bankruptcy of many financial system entities, how these statements translate into an approach to improving the credit risk management process and to comply with banking procedures regarding lending and securities operations and compliance with good business practices?
In my opinion, such unwritten statements can increase the moral risk and reduce the pressure and need to improve credit risk management processes.
On the other hand, the merger of one of the largest commercial finance sector entities and the emergence through mergers and acquisitions of larger banks may generate an increase in systemic credit risk, the negative consequences of which in the event of another financial crisis will be more difficult to control by central banking rescue tools, if the financial reserves shaping the issue of the security of the financial system in the economy maintained by certain central banks will not grow at such a rapid pace as the increase in the balance sheet total of merging and emerging growing banking entities.
In view of the above, after the past decade from the global financial crisis of 2008, the question still remains: Will further mergers and acquisitions in the investment banking sector increase the credit systemic risk in the economies?
Please, answer, comments. I invite you to the discussion.
Has the relocation of large factories from highly developed countries to countries with cheaper labor costs caused unfavorable situations of rising unemployment in some regions in your countries?
It turned out that from the global financial crisis of 2008, those countries in which the domestic industry was more developed faster.
Some industries, including large factories, have been expatriated to countries with cheaper labor costs.
For a corporation that decides to move such assembly plants, it is a business goal of saving labor costs.
However, in the city from which this factory emigrated, unemployment is rising. If it was a small town and the factory was the main employer, the problem of a significant increase in unemployment on the local market arose.
In some countries, restrictions have been introduced to limit the scale of this process of emigration of large production factories and sometimes entire branches of the economy to other countries.
How do you feel? Should the governments of individual countries regulate these issues, should liberalization be in this matter or should it be under the control of the state, i.e. the government of a given country?
Please, answer, comments. I invite you to the discussion.
What are the most important determinants of the commercial banks' lending policy in your country?
The most important issue is the credit risk management for loans granted to commercial banks and the adjustment of credit policy to the quality of the loan portfolio, the clients' economic and credit standing, borrowers, business climate, customer incomes and changing systemic risk, investment in the business sector and the changing average creditworthiness of borrowers and potential customers. I described these issues in my publications.
In view of the above, I am asking you the following question: What are the most important determinants of the commercial banks' lending policy in your country?
Please, answer, comments. I invite you to the discussion.
Is it possible to combine the question of the reliability of the banking procedures implemented in the area of risk management and the sources of financial crises?
The basic data used to determine the effectiveness of commercial banks are included in the banks' financial statements. these data relate to the bank's involvement in specific active transactions, necessary to determine the quality of the loan portfolio, to determine the quality of credit, operational, liquidity, debt, operational risk management processes, etc. An IT risk analysis should be added to this. In addition, financial statements also include data to calculate the deposit security ratio, profitability of individual categories of assets and use of available financial resources. This type of data should be combined with individual categories of estimated risk levels measured in correlation to the involvement in individual active operations. However, in the case of the analysis of the investment bank's effectiveness, it should additionally include an analysis based on risk assessment models for investment in derivatives and other capital market instruments. In this regard, many banking procedures were previously unreliably carried out which generated very high levels of credit risks and caused huge financial losses, eg in the Lehman Brothers investment bank, bankruptcy of this bank and the beginning of the global financial crisis in mid-September 2008.
I researched this problem and in my publications I confirmed that it is possible to combine the question of the reliability of banking procedures implemented in the area of risk management with sources of financial crises.
However, I would like to hear your opinion on this matter.
In view of the above, I am asking you the following question: Is it possible to combine the ethics of banking procedures in the field of banking operations with the sources of financial crises?
Please, answer, comments. I invite you to the discussion.
Can current globalization processes increase the systemic risk of global economic and financial crises?
Yes. In my opinion, globalization is leading to the Integration of Business Cycles. In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008. At that time bankruptcy was announced by one of the largest investment banks in the world. As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated. It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years these processes continue. Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.
Please reply. I invite you to the discussion
What is the important topic for the study of the sources of the global financial crisis in 2008?
An important topic in the area of finance is the management of financial risk in the context of the analysis of sources of economic, financial, debt and other crises. The financial systems still have not been improved in their functioning, especially in the area of investment banking, in terms of unethical practices, the use of which was one of the significant sources of the global financial crisis of 2008.
In connection with the above in my opinion important topic on finance is the issue of risk management in the context of the analysis of the sources of the global financial crisis.
I invite you to the discussion
Can the genesis of global economic crises be combined with technological revolutions?
In addition to many economic and financial sources in the field of unreliable risk management procedures, re-evaluation of assets on capital markets, long-term too low interest rates by central banks, granting loans to entities without creditworthiness, etc., according to non-classical theories, other sources of crises economic.
One of these non-classical theories is combining deep economic crises with technological revolutions, the secondary effect of which is over-investing in technological projects and re-evaluating the assets that these projects relate to.
In view of the above, I am asking you: Can the genesis of global economic crises be combined with technological revolutions?
Please, answer, comments. I invite you to the discussion.
What would have to change in contemporary, developed and indebted economies to start reducing their public debts?
Some of the developing countries, such as China, are generating large financial surpluses. Chinese banks place their large financial surpluses in, among others, US Treasury bonds, thus financing the US budget deficit. In contrast, some developed countries in Europe and the US have high public debts, which strongly increased, among others by the global financial crisis of 2008. What will happen if in the development of the current technological revolution, Industry 4.0, is the developing world going to take precedence in technological development? Will it be a sidetrack of the existing highly developed countries of the Western world?
Please, answer, comments. I invite you to the discussion.
Is banking lobbying in rating agencies, moral hazard in investment banking and ... can be the main factor in the next global financial crisis?
Does deepening the liberalization of the rules of conducting transactions in financial markets, banking lobbying in rating agencies, moral hazard in investment banking, failure to observe prudential procedures, neglecting the methodology of creditworthiness analysis in the process of verification of potential borrowers and violation of ethics in business can be the main factor in the next global financial crisis ?
And these types of factors at the transactional and procedural level were, in addition to the mild monetary policy of central banking, indicated by economists as the key determinants of generating the global financial crisis in 2008.
Please, answer, comments. I invite you to the discussion.
Analysis of the functioning of securities markets?
The study of the functioning of securities markets is particularly important in the context of the analysis of the effective functioning of modern economies. It is particularly important to limit the systemic investment risk and strengthen the instruments of financial supervisors to reduce the likelihood of further global financial crises.
In view of the above, I would like to ask you: Analysis of the functioning of securities markets?
Please, answer, comments. I invite you to the discussion
Credit relations between banks and borrowers borrowing funds
In the situation of high indebtedness of a significant part of households, there is a high systemic credit risk that may be the source of the domestic financial crisis.
I study the determinants of credit risk. I am researching the credit risk management process and commercial banks' loan procedures as well as financial relations between individual entities operating in national economies.
In view of the above, the current question is:
Please, answer, comments. I invite you to the discussion.
Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?
In the long-term period, this correlation is significant. On the other hand, however, the importance of state intervention implemented through monetary policy pursued by the central banking and through the budgetary policy pursued by the ministerial bodies appointed for this purpose within the state administration is growing. The central banks in many countries, including the Federal Reserve Bank and the European Central Bank after the outbreak of the global financial crisis in the autumn of 2008, have applied particularly significant interventionist monetary policy. I researched this issue and published scientific publications on this topic.
In view of the above, I would like to ask you: Is the situation on the stock exchange markets really correlated with the macroeconomics of the entire economy?
Please, answer, comments. I invite you to the discussion
Is there or previously existed high systemic credit risk in the banking system in your country?
The issue of the quality of the credit risk assessment process carried out in the bank is particularly important for the assessment of the functioning of a commercial bank. In my country, the risk management process was not always carried out reliably. As a result, in the mid-1990s, the risk of a possible financial crisis emerged in my country. We managed to avoid this crisis. Below are the key issues of this problem.
In my country, system prudential instruments work correctly. In commercial activities, commercial banks usually reliably carry out creditworthiness tests of potential borrowers. In addition, investment banking is underdeveloped to a small extent, so currently the sources of the domestic crisis are relatively small. However, this was not always the case. When the banking system was created in my country in the realities of the market economy in the early 1990s, the quality of the loan portfolio deteriorated significantly due to several important reasons. At that time, the banks lacked knowledge about the procedures for testing the creditworthiness of customers and estimating the bank's credit risk. There was no centralized database gathering information from all banks about how borrowers repay loans. This database is created only a few years after system and economic changes and the creation of commercial banks. This database is called Credit Information Bureau in my country. Currently, banks normally use this database when conducting a creditworthiness test of a potential borrower. In addition, at the beginning of the 1990s, many loans were granted without adequate collateral, because a significant portion of business loans was granted after acquiring knowledge without conducting a creditworthiness test and thus without assessing the level of risk that the bank accepts when granting loans. At that time, there was a high credit systemic risk. In many banks, there was a liquidity problem and a significant proportion of banks could lose their liquidity and collapse. However, the central bank managed to notice the problem in a timely manner and through the restructuring of the restructuring bonds addressed to commercial banks, numerous bank failures were avoided. These bonds were offered to commercial banks on preferential terms. Commercial banks the costs of this restructuring lasting the next few years have passed on to customers. Thanks to this, for many years, banking products in my country were much more expensive than in other developed countries. However, since the end of the 20th century, the banking system in my country already looks almost completely different. All prudential instruments, both at individual banks and at the level of the entire banking system, were recreated following the example of developed country standards in the model of the European financial system. There are very few cases of bankruptcy of commercial banks in my country. On the other hand, those that happened were, unfortunately, certain problems that were usually noticed late by banking supervision noticed by the bank supervision until the bank announced the loss of liquidity. This issue should be improved. I deal with the research of credit risk management processes in commercial banks. I invite you to read my publications on this topic.
I invite you to the discussion.
Most of the banks that announced permanent loss of financial liquidity and collapsed were usually small private banks in my country. However, large commercial banks have a diverse shareholding structure. In some of these banks the majority shareholder is the State Treasury and it is these banks that usually consider themselves the safest. This is a popular opinion, however, not entirely justified because these banks use analogous procedures for assessing the creditworthiness of clients and credit portfolio risk management processes as those used by foreign banks, which in the 90's began to be favored in my country and commercial banks - historically national, in which the majority financial institution is a foreign financial institution, usually another bank with headquarters abroad or foreign and domestic investment funds.
I also study scientifically the sources of the global financial crisis that emerged in autumn 2008 when bankruptcy was announced by the investment bank Lehman Brothers. I also analyze the applied instruments of interventionism as part of monetary policy and assistance packages granted to banks in order to answer the question about their validity and their effects. The applied instruments of intervention state aid for the banking system are considered justified. They were expensive for the entire economy but thanks to this the financial crisis was able to quickly master and limit the negative effects of the downturn in the national economies, liquidity in the commercial banking sector was quickly restored. Most aspects of this issue of the applied instruments of intervention assistance to commercial banks are assessed positively. However, there are many issues to improve to reduce the risk of a similar, next global financial crisis in the future.
I invite you to scientific cooperation
In view of the above, I would like to ask you: Is there or previously existed high systemic credit risk in the banking system in your country?
Please, answer, comments. I invite you to the discussion.
Is the importance of the psychology of financial markets and behavioral economics in the securities markets falling after the global financial crisis?
Are the investors operating in securities markets more cautious in making investment decisions after the global financial crisis, or are they more thoroughly analyzing the investment risk of investing in capital markets?
Has any of you conducted research aimed at identifying possible changes in the significance of the psychology of financial markets and behavioral economics in the capital markets, including securities markets after the global financial crisis of 2008?
If research shows that the importance of the psychology of financial markets and behavioral economics on the capital markets is decreasing, what is it mainly determined?
Is this the result of post-crisis higher awareness of investment risk among investors, or also changes in the structure of dominant segments of investors operating on capital markets, or is it also the result of the increase in the number of transactions conducted by computerized transaction systems?
Please reply. I invite you to the discussion
Has an economic crisis with depression and high unemployment occurred in your country during the last decades?
If so, please write down the negative aspects of this crisis. For example, in terms of growth in unemployment, falling investment, falling income, etc. Was the crisis a national crisis or emerged as a secondary effect of a regional or global economic or financial crisis?
During the recession a strong decline in economic growth is recorded. On a yearly basis, this is an absolute decrease with a negative value. In such a situation, production decreases sharply, unemployment is also growing, such as business cycle, investment, consumption and income are falling. In such a period high inflation, high interest rates, problems in the regulation of the national monetary policy and in the activation of entrepreneurship may occur. Tax revenues are falling to the state budget and there is no financial means to fight high unemployment, problems build up and can go on until the state instruments of state intervention start to work positively, activating economic activity. However, if the country is heavily indebted to foreign banks and investment funds or has previously issued government bonds to buy, which it has bought from other countries, the problem may be more serious and difficult to solve. In such situations, this often led to the declaration of bankruptcy by a given country.
Please, answer, comments. I invite you to the discussion.
State interventionism Post-Keynesianism as an anti-crisis economic policy?
In my opinion, post-Keynesianism has been used in practice many times in countries when leaving deep economic crises. Until now, post-Keynesianism has been used to a large extent in many countries to restore the entire national financial systems and, indirectly, entire economies and to save the selected major manufacturing enterprises and financial institutions from the bankruptcy of the global financial crisis in autumn 2008. The economy was restored to balance at the expense of increasing budget deficits in national public finances. New formulas of post-keyism were applied under state intervention. Paradoxically, the potential consequences of the potential deepening of the global financial and economic crisis in the event that this state intervention is not applied are unknown. Probably the crisis would be much deeper, more socially costly and would last much longer. this type of assumption determines that post-Keynesian instruments of state intervention are used almost without restrictions, ie according to the proverb: "the end justifies the means". In this assumption, theoretical foundations become a secondary element, added according to anti-crisis, anti-cyclical interventionist, and active economic policy. I conducted research and wrote scientific publications on this topic.
I invite you to the discussion.
Has investment banking been restructured after the global financial crisis of 2008 so that another such crisis would not happen again?
I believe that the risk continues to grow in financial systems. This means that another global crisis can not be ruled out in the next few years. The financial system has not been repaired, and necessary investment programs for prudential systems have not been forced on investment banks. Large banks are becoming even larger. in autumn 2008 one of Lehman Brothers investment banks collapsed but several other similar ones earned in this crisis, in addition, there are many indications that they have contributed significantly to generating such a high systemic risk, they used the crisis to their business goals. The investment banks were not restricted from taking such high credit risk, which contributed to the outbreak of the global financial crisis in 2008. The system still remains vulnerable, the procedures are still not honestly observed. The fact that another global financial crisis will generate investment banks is almost certain. The only question is when will it happen?
Please, answer, comments. I invite you to the discussion.
What could lead to another global financial crisis?
Some economists say that it is enough for China to open up US Treasury bonds on the open market. Then a sharp drop in the US dollar to other currencies would trigger a new global financial crisis. But does the como depend on this to trigger such a global crisis? For now, no, but will not there be a future big investment bank that wants to earn in this or a similar surgery, we do not know.
Please, answer, comments. I invite you to the discussion.
The issues of risk management in the context of determinants of the global financial crisis are described in the publications:
https://www.researchgate.net/publication/323244391_Determinants_of_credit_risk_management_in_the_context_of_the_development_of_the_derivatives_market_and_the_cyclical_conjuncture_economic_processes
https://www.researchgate.net/publication/327201116_Importance_and_implementation_of_improvement_process_of_prudential_instruments_in_commercial_banks_on_the_background_of_anti-crisis_socio-economic_policy_in_Poland
https://www.researchgate.net/publication/327201132_The_role_and_application_of_Keynesian_macroeconomic_anti-crisis_theories_in_the_context_of_development_of_the_financial_system_in_Poland
https://www.researchgate.net/publication/320074785_THE_SHADOW_BANKING_AS_AN_EXAMPLE_OF_INEFFICIENCIES_IN_THE_FUNCTIONING_OF_THE_BANKING_SYSTEM_IN_POLAND
I invite you to discussion and cooperation. Greetings
The issues of globalization of financial and banking systems are described in the publications:
https://www.researchgate.net/publication/323244562_Adjustment_of_Polish_banks_to_international_standards_as_a_factor_of_globalization_of_the_national_financial_system
https://www.researchgate.net/publication/320061057_THE_IMPORTANCE_OF_ECONOMIC_GLOBALIZATION_IN_THE_CONTEXT_OF_THE_DEVELOPMENT_OF_THE_FINANCIAL_SYSTEM_IN_POLAND
https://www.researchgate.net/publication/327201145_Social_and_economic_determinants_of_the_processes_of_economic_globalization_that_shape_the_development_of_the_banking_system_in_Poland
https://www.researchgate.net/publication/320074691_ADMINISTRATIVE_LEGAL_AND_SUPERVISORY_DETERMINANTS_OF_GLOBALIZATION_OF_FINANCIAL_MARKETS_AND_THE_BANKING_SYSTEM_IN_POLAND
I invite you to discussion and cooperation. Greetings
The issue of the impact of monetary policy on the stability of financial systems in the context of the global financial crisis is described in the publication:
https://www.researchgate.net/publication/320060288_ACTIVATING_INTERVENTIONIST_MONETARY_POLICY_OF_THE_EUROPEAN_CENTRAL_BANK_IN_THE_CONTEXT_OF_THE_SECURITY_OF_THE_EUROPEAN_FINANCIAL_SYSTEM
I invite you to discussion and cooperation. Greetings
What causes the imbalance in economy. How can we get value addition in service for global perspective. How life cycle assessment could be made as sustainable resources management.these questions need to be answered through research
Dear Colleagues and Friends from RG,
If anyone of you is interested in this subject or conducts research in the field of the above issues, I invite you to the discussion.
Please, answer the following question:
What are the important topics in the field: global financial crisis?
The above discussion inspired me to the following considerations:
Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?
In principle, YES, but it should be specified precisely the framework for a possible anti-crisis launch and implementation of the policy of active state intervention. The Federal Reserve Bank should continue to fulfill its current functions. In this respect, it is the most important institution in the US in terms of maintaining financial stability in the banking system and indirectly in the entire financial system. In addition, indirectly supports inter-branch, transactional, market, business and cross-border trade and capital flows. As the Federal Reserve advises on the issue of maintaining financial stability, it also translates into the entire US economy and also to a large extent on the entire global economy while the economy The US is recognized as a key global player. On the other hand, the Federal Reserve Bank, using its monetary policy instruments and the possibility of buying back lost commercial loans and junk securities, should focus on stabilizing the situation on the financial markets rather than on actively stimulating demand for securities, which may generate another global one in the long run. financial crisis. I examined this problem and described it in my scientific publications.
In view of the above, the current question is: Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?
Please, answer, comments. I invite you to the discussion.
What are the important topics in the field: global financial crisis?
The above question is still and probably will be valid for a long time.
Dear Colleagues and Friends from RG,
If anyone of you is interested in this subject or conducts research in the field of the above issues, I invite you to the discussion.
Monoply and decision making of top corporations trying to control the politics and policies of whole world
The above discussion inspired me to the following considerations: Are there verified and scientifically justified forecasts of the potential emergence of another global financial crisis? In recent years, the importance of the problems of scientific attempts to verify and justify for formulated forecasts of the potential emergence of another global financial crisis is growing. The problem is particularly important because some of these theories suggest that the next global financial crisis may be similarly surprising for the majority of economic entities, but it may also be characterized by a sub-standard or higher level of negative economic effects of the downturn in the situation of the next global financial crisis. I invite you to the discussion.
There is no objective justification, which could be universally recognized as a highly probable forecast developed on the basis of eg an efficient combination of several theories developed on the basis of conducted scientific research. If that happened, then the principle of "self-checking prophecy" would work and expected on the basis of a widely recognized forecast at a given time the global financial crisis would not appear in the form or time when it was expected. The forecast event would not have appeared because the majority of interested persons, entities, including banks and investment funds, prepared for this expected event. As most stakeholders would trigger appropriate additional preventive and / or prudential instruments, the global financial crisis would not appear in line with the original forecast. I invite you to the discussion.
On the other hand, different subjective opinions are formulated, attempts to forecast the development of domestic and international financial markets in the coming years and the potential emergence of another global financial crisis. Since the appearance of the previous global financial crisis in mid-September 2008, economists have formulated various theories about the determinants, scale and time of the emergence of another similar financial crisis in the future. I invite you to the discussion.
For example, there were theories that after 7 years of "lean" prosperity and economic growth will take 7 years of "fat" after which another crisis may occur. Functional theories suggest that another global financial crisis will appear soon, although it is not known exactly when. These theories are based on the thesis of not correcting the functioning of the overly liberalized, deregulated financial markets, i.e. the failure to remove the main sources diagnosed as the cause of the global financial crisis of 2008. Nor have the prudential procedures for credit risk management in investment banking been fully improved. I invite you to the discussion.
Through the Federal Reserve Bank's anti-crisis policy of buying junk assets from commercial banks, millions of reprinted dollars were pumped into the economy without economic coverage in the equivalent of produced economic goods. A significant part of these additional dollars indirectly conjunctural generated a quick return of prosperity on the securities markets, perhaps too fast because in a few years after the global financial crisis in 2008, the valuation of securities on the largest securities markets exceeded the level of autumn 2008 . I invite you to the discussion.
However, in the domestic economies there has been a clear improvement in the economic situation in, among others, production, income, investment, purchase of real estate, drop in unemployment, etc. The optimal quality of commercial banks' loan portfolios and the growing level of savings of people with a low share of financial surpluses in securities seem to suggest that the systemic credit risk in the economy has not yet reached its maximum levels. This subject is the subject of research, which I conduct in the area of the necessity of continuing the process of credit risk management improvement, examined, measured and accepted by commercial banks. I have published several scientific articles on this topic. In view of the above, the current question is: Are there verified and scientifically justified forecasts of the potential emergence of another global financial crisis? Please, answer, comments. I invite you to the discussion.
Dear Prof. Prokopowicz,
This question almost sounds like an invitation to discuss the downfall of capitalism. I think it can be proved that if the stock market operates in a country with history , geography and science at discrete events of space and time market crashes may occur. This no matter how big or small the stock market is, Mallick (1993, 2009, 2014, 2015), Mallick, Hamburger & Mallick (2016, 2017, 2018). Hence, global financial crises is like adding up the probabilities of crashes for all economies taken together. This if all countries are independant of each other in terms of the uncertainty of their environmants like history, geography, politics etc.. can add up to greater than one. Which means on any given day some stock market will clash somewhere! An ominous prediction but that's as bad as this question can get. Prof. Prokopowicz sorry for being light headed. But that is probably why we need different day and nights across the world, different histories and socioeconophysical relativity and similar problems. Thanks for asking. A very nice question. This can be solved without recourse to Marxian thought by invoking String Econophysics in spacextime on Earth and its environment.
S.K.Mallick (corresponding author)
for S.K.Mallick, S. Raychaudhury, S.Mallick
of RHMHM School,
USA, Japan, India.
In the context of the above considerations, the following question is also current:
Behavioral economics and interventionist monetary policy and the cyclically changing situation in the securities markets?
How behavioral economics can be used to study investor behavior in capital markets, including securities markets?
How is it that in these markets every several or a dozen or so years, there is a high re-evaluation of the valuation of financial instruments, assets, including company shares? What is the issue of the effect of the sheep's rush, which to some extent is often inspired by the appropriately constructed, liberalized offer of products and services of financial institutions?
Besides, how does it fit into the issue of the cyclical cyclical nature of economic processes, ie the volatility of economic growth of entire national economies in the long-term perspective? In addition, the issue of the various state intervention instruments applied by national governments is also important, some of which also act on consumer behavior of small investors and shareholders.
Considering anti-crisis, counter-cyclical, interventionist monetary policies based on low interest rates and central banks' buying programs for assets lost from commercial banks, it is reasonable to study the potentially high level of state intervention in the financial markets. In connection with the liberalization of the functioning of capital markets and increasingly emerging financial crises since the 1970s, the scale of active interventionist monetary policy of central banking is growing, but also in relation to capital markets, including securities markets. Therefore, deregulated and indirectly subjected to potential anticyclical state intervention, capital markets, including securities markets, are increasingly losing balance, falling into extreme market re-evaluation and undervaluation of valuations of securities, and consequently growing systemic investment, credit, etc. risks and increasingly emerging financial crises.
In view of the above, I would like to ask you: Behavioral economics and interventionist monetary policy and the cyclically changing situation in the securities markets?
Please, answer, comments. I invite you to the discussion
The above discussion inspired me to the following considerations:
How should the efficient, pro-developmental, crisis-proof central bank control of liquidity in the state's financial sector be improved, including primarily in the commercial financial sector of the state mainly represented by commercial banks but also with regard to maintaining liquidity in the public finances sector?
The central bank is the most important control and system institution of the public and commercial financial system of the state. One of the most important functions of the central bank is the analysis, control and coordination of monetary policy, including the state of liquidity in the state's financial system, both in the commercial financial system represented primarily by commercial banks and in the public financial system of the state regarding public finance, including financing budget deficit with the use of state treasury bonds.
In the context of more and more frequent national and global financial and currency crises, state finances and economic crises since the 1970s, the importance of central banking in liquidity control in the state financial sector, in the commercial sector and the public financial system of the state is increasing. The role of the central bank in stabilizing macroeconomic processes and activating liquidity on the interbank market, in maintaining lending by commercial banks, could be seen in the context of the analysis of the development of the global financial crisis of 2008 and applied state intervention instruments aimed at improving liquidity in the banking sector. In this way, the financial systems of the states have been saved by an even greater disaster than the problems that have occurred.
Do you agree with my opinion?
Therefore, I am asking you for the following query:
What should be perfected sparwnie conducted by the central bank control liquidity in the commercial and public sector financial state?
Please reply
I described these issues in a recently published publication:
Article A safe monetary central banking policy as a significant inst...
I invite you to discussion and scientific cooperation
Best wishes
In view of the above, it is also important to include in the above discussion also the following issue:
In the situation when a global financial crisis appeared in the autumn of 2008, a long-time public discussion on the sources of this crisis, explaining its development and pointing to the need to improve credit risk management procedures began in the media.
In the course of numerous analyzes carried out after 2008, many irregularities in the functioning of investment banking operating on capital markets in 2006-2008, investing in high-risk securities and their derivatives, were diagnosed. In addition, the institutions of supervision over financial systems did not notice many irregularities in the process of granting mortgage loans and in the rating agencies issuing too high, overly optimistic assessments for investment banks located in the forfeiture, sold for not fully informed about a high level of credit risk for investors, which were offered securities, credit derivatives, subprime bonds. Financial system supervisors also did not notice high systemic risk in a situation where a significant part of all mortgage loans in developed countries with the Anglo-Saxon model of the financial system were insured by a few insurance companies. Financial institutions also did not notice unethical practices of selling investment banks to investors of securities, whose valuation on securities markets was significantly overvalued and in the situation when the global financial crisis occurred, these securities were almost nothing or nothing worth buying.
The global financial crisis in 2008 was the reason for increasing the scale of interventionist economic policies in developed countries. The main instrument of this policy was the significant development of a mild monetary policy and interventionist measures aimed at forcing the restructuring processes of heavily indebted enterprises and stop-ping the decline in lending by commercial banks. As part of the pro-development activities of the state intervention, the Federal Reserve Bank applied a mild monetary policy of low interest rates and a program for activating lending and maintaining liquidity in the financial system by financing the purchase from commercial banks of the most en-dangered assets. A few years later, the European Central Bank applied the same activities of activation monetary policy. The functioning of the financial system will not be fully corrected as long as there will be a message in the media encouraging the banks that the global financial crisis is primarily attributable to the Federal Reserve Bank in the USA. In many para-documentary films, which, as a para-scientific explanation and education of citizens, pro-mote the philosophy of combining deregulation of financial markets with the development of a free market, and attempts to regulate markets are trying to implement the principles of real socialism, a system quite different from that considered an ultramarine US economy.
Do you agree with my opinion?
Therefore, I am asking you with the following query:
Was the picture of the sources of the global financial crisis presented in the media fully objective?
Dear Friends and Colleagues of RG
I described the problem of "Anti-crisis state intervention and created in media images of global financial crisis" in the publication:
Article Anti-crisis state intervention and created in media images o...
Please reply
Best wishes
Dear Mr. Dariusz Prokopowicz ,the global financial crisis is an impact, to counter the impact does not come then every country must maintain trade between countries that they do optimally, decisions made by each country must consider changes in global commodity demand in the short term, at least three years. Indonesia, now still depends on global trade, if this worsens, a financial crisis will occur. Regards.
In the context of the above considerations, the following question is also current:
Why after 2008 the functioning of financial systems has not been improved?
The key questions for the functioning of domestic and international financial markets are as follows:
- Why after 2008 the functioning of financial systems has not been improved and the same factors of systemic credit risk still work, and there is still a high probability of generating another global financial crisis?
- How does the lack of improvement of prudential instruments and failure to carry out the necessary improvement of the credit risk management process increase the scope of potential systemic credit risk in the sphere of financial systems, including banking systems with particular focus on investment banking?
- How to improve the functioning of financial systems, how to improve the investment banking activity to increase the security of financial systems to reduce the likelihood of the emergence of another global financial crisis?
- How should the process of necessary improvement of credit risk management be carried out in order to increase the security of financial systems, including banking systems with particular emphasis on investment banking?
In my publications (listed below) I answer these questions.
Dear Friends and Colleagues of RG,
The issues of risk management in the context of determinants of the global financial crisis, globalization processes, technological progress and other factors I described in the publications:
Article APPLICATION OF DATA BASE SYSTEMS BIG DATA AND BUSINESS INTEL...
Article GLOBALIZATIONAL AND NORMATIVE DETERMINANTS OF THE IMPROVEMEN...
Article Determinants of credit risk management in the context of the...
Article Importance and implementation of improvement process of prud...
Article The role and application of Keynesian macroeconomic anti-cri...
Article THE SHADOW BANKING AS AN EXAMPLE OF INEFFICIENCIES IN THE FU...
Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...
Article A safe monetary central banking policy as a significant inst...
Article Anti-crisis state intervention and created in media images o...
Article Soft monetary central banking policy and Plan for Responsibl...
I invite you to discussion and cooperation.
Best wishes
In the context of the development of international capital markets, the development of stock exchanges, increasingly globalized and related, the importance of globalization of financial markets, including capital markets and stock exchanges, is increasing.
On these capital markets, there are also increasingly large, internationally operating investment banks and investment funds, whose profits generate increasingly from speculative transactions of securities issued by companies and the public sector, including also Treasury bonds of other countries.
In addition, currency markets are growing, on which speculatively operating internecional banks and hedge investment and investment funds also speculatively. Before the emergence of the global financial crisis in 2008, it was mainly investment banking that approved the excessive levels of credit risk and speculative, too high, overvalued valuations of securities on stock exchanges. The problem of accepting an excessively high level of credit risk also concerned the sale of mortgage loans by deposit and credit institutions institutionally prolonged with investment banking, which was enabled in the mid-1990s by liquidating the prudential regulation of the Glass Stegall Act established after the Great Depression of 1929 in order to raise security of the banking and financial system.
Establishment of investment banking, wanting to lose responsibility for generating the global financial crisis, blamed the central banking system, suggesting that the central bank is responsible for the financial crisis because it maintained low interest rates for many years. Paradoxically, this central bank, ie the Federal Reserve Bank in the USA and the European Central Bank in the Eurozone by buying out from the threatened bankruptcy of commercial banks most at risk of insolvency of credit assets saved the financial sector from total destabilization, from loss of citizens' trust for the banking system and thus by taking the responsibility from the management of investment banks for generating the global financial crisis. Thanks to this, it was possible not to improve prudential systems, financial systems not cured of the disease known as the ease of falling into serious financial crises, each of which is increasingly serious and increasingly the costs of saving the banking system through total destabilization and necessary restructuring are shifted to society.
The recent global financial crisis that appeared in autumn 2008 was an example of the increase in potential systemic credit risk in many countries in which the governments of these countries through the issue of government bonds and their sale to foreign investors led to a significant increase in the risk of a liquidity crisis in the state finances and in many smaller economies, they generated major crises in the debt of state finances.
Do you agree with my opinion?
In view of the above, I am asking you the following question:
Why after 2008 the functioning of financial systems has not been improved?
Please reply
This issue is described in the following publication:
Article CURRENT AND HISTORICAL DETERMINANTS OF GLOBALIZATION PROCESSES
Article Globalization and the process of the system and normative ad...
I invite you to discussion and scientific cooperation
Dear Friends and Colleagues of RG,
The issues of risk management in the context of determinants of the global financial crisis, globalization processes, technological progress and other factors I described in the publications:
Article APPLICATION OF DATA BASE SYSTEMS BIG DATA AND BUSINESS INTEL...
Article GLOBALIZATIONAL AND NORMATIVE DETERMINANTS OF THE IMPROVEMEN...
Article Determinants of credit risk management in the context of the...
Article Importance and implementation of improvement process of prud...
Article The role and application of Keynesian macroeconomic anti-cri...
Article THE SHADOW BANKING AS AN EXAMPLE OF INEFFICIENCIES IN THE FU...
Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...
Article A safe monetary central banking policy as a significant inst...
Article Anti-crisis state intervention and created in media images o...
Article Soft monetary central banking policy and Plan for Responsibl...
I invite you to discussion and cooperation.
Best wishes
The above discussion inspired me to the following considerations:
What is the current level of systemic credit risk in financial systems? Is the current level of systemic credit risk in financial systems much lower compared to the situation preceding the appearance of the global financial crisis in 2008?
After the emergence of the global financial crisis in autumn 2008, the economic situation in many countries has significantly decreased. Investments, income, profits, production, etc., fell sharply and unemployment increased. The governments of many countries have applied a program of anti-crisis fiscal measures and interventionist, post-Stalinist activation of financial liquidity in the banking sector run by central banks. A huge amount of funds were invested that were pumped into banking systems to restore the booming markets in credit markets and securities markets. As a result, public debts and budget deficits in state public finance increased in some developed countries. Quickly, after several years of the financial crisis, the valuation of securities returned to high, perhaps also speculative, overvalued levels.
In view of the above, in many scientific publications, there are still deliberations which are to lead to an objective answer to the following questions: Did the applied anti-crisis state intervention instruments work effectively? Have the applied security procedures and credit risk management systems been fully corrected? It is obvious that if the goal of increasing the stability of the financial system, credit risk management systems should be improved. Security procedures and credit risk management systems should be improved if the risk of the emergence of another global financial crisis is to be significantly reduced. The analyzes show that on many issues the supervision of the financial system has been improved. However, investment banking still has a strong multi-faceted relationship with classical deposit and credit banking, credit rating agencies are still capital-related with some of the large investment banks, the "too big to collapse" principle still works, etc.
In addition, there are further key questions: Has the functioning of capital markets after the global financial crisis of 2008 already been properly corrected in terms of the supervision of the financial system, risk analysis and securing financial transactions on capital markets, financial transactions carried out with the participation of investment products offered by banks and investment funds?
Please reply
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