Dariusz,

Interesting question. Financial risk and risk management: the question is whose risk? Being both an observer and victim of the 2008 financial crisis, my perspective prob ably differs from what you were expecting. Risk/Reward is the cornerstone of investing, but when there is reward with little risk for the decision makers (e.g. “too big to fail” and “bailouts”) where is the risk? Gambling with someone else’s bank roll without having to replace (or be responsible for) losses is exciting and fun, but not necessarily responsible.

Christopher

In addition to unethical practices of investment bankers, following two key elements are equal contributors to global financial crisis like 2008

a) Lack of macro level risk measurement tools (particularly for regulators) to have a eagle's eye to observe the volatility across asset classes and constantly monitoring of the gap in valuation and price. This can help regulators/analysts to identify or foresee the problem at early stage.

There is huge scope for hard core specialists from both economics and technology, to contribute in this area to provide stability in the future of global financial system.

b) investors greed to maximise returns without understanding the investment product.

Better investor education initiatives can reduce this problem at large extent.

Crash risk?

Hi Dariusz Prokopowicz ,

I think we already done this things as a like as in mortuary table. We also made some comparison with Black Tuesday. In my view the world may get into another Economical crisis within 5 year it will starts from old business and spread across the entire market.

Dear Friends and Colleagues of RG

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.

Do you agree with me on the above matter?

Please reply

I invite you to the discussion

Best wishes

The above discussion inspired me to the following considerations:

Was the picture of the sources of the global financial crisis presented in the media fully objective?

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 Friends and Colleagues of RG

I described many aspects of the above issues in my publications regarding various aspects of the global financial crisis that appeared in autumn 2008.

The issues of risk management in the context of determinants of the global financial crisis are described in the publications:

Article APPLICATION OF DATA BASE SYSTEMS BIG DATA AND BUSINESS INTEL...

Article GLOBALIZATIONAL AND NORMATIVE DETERMINANTS OF THE IMPROVEMEN...

Article GLOBALIZATIONAL AND NORMATIVE DETERMINANTS OF THE IMPROVEMEN...

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...

I invite you to discussion and cooperation.

Best wishes

Dear Friends and Colleagues of RG

I conduct research in key aspects of this issue. The results of these tests are described in the following publications:

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:

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 above considerations, the following question is also current:

What will be the main sources of the next global financial and economic crisis?

What will be the main sources of the next global financial and economic crisis, which could be faring in the next dozen or so years?

Will they be analogous to the crisis source as in the situation of previous global financial and economic crises?

Will the next global economic crisis be triggered by the financial crisis?

Will the next financial crisis be started similarly to the previous bankruptcy by a large financial institution, a large bank or a corporation?

Will the declaration of bankruptcy by a large business entity trigger strong drops in over-valued securities on securities exchanges?

However, will such huge reserves of money be accumulated in central banks, including those reprinted on a regular basis, that in the situation of potential loss of liquidity by a large, economic entity, the economy will not fail because it will be saved from bankruptcy in the framework of state aid, as part of state intervention?

Is the principle still valid that "the big one can not get stuck" because it will be saved by the government to prevent the emergence of a new large scale of the financial and economic crisis?

Or maybe in the perspective of the next years will also be completely different factors that generate a decline in economic efficiency and a deterioration in the emergence of a crisis in real economies?

Can the next global economic crisis be determined by adverse climate changes, the global warming process?

Please reply

I invite you to the discussion

Thank you very much for your response and participation in the discussion

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 Anti-crisis state intervention and created in media images o...

Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...

Article A safe monetary central banking policy as a significant inst...

Article Soft monetary central banking policy and Plan for Responsibl...

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...

I invite you to discussion and cooperation.

Thank you very much

Best wishes

The key research topic in the context of the analysis of the sources and effects of the global financial crisis in 2008 is the improvement of credit, operational and market risk management processes, security procedures for computerized analytical systems and the inclusion of derivative instruments in these processes. In addition, the inclusion of derivatives in the system of institutional supervision of financial systems. An interesting research problem may also be the improvement of procedures for conducting financial operations and their implementation in banks and investment funds, taking into account personnel risk, business ethics and corporate social responsibility. An important topic for scientific research may also be the issue of systemic improvement of financial systems, especially in capital market segments, including stock exchanges in connection with a specific monetary policy of central banking and launched bank rescue programs against bankruptcy by buying junk securities and unsupported by clients lost loans.

What other interesting research topics can be formulated in the field of the above issues?

What do you think about this topic?

Please reply

I invite you to the discussion

THE BREIXIT FOR ME

INGRID

In quality in the world. The haves and those who don't have both human capital as well as financial capital.

Dear Ingrid Del Valle García Carreño, Tumuhairwe Goretti, Thank you for participating in the discussion.

Yes, the risk factors that may lead to a crisis may differ in some economies.

Best wishes,

Dariusz Prokopowicz

What were the Triggers for the Crisis?

Dear Emmanuel V Murray,

Thank you for the positive assessment and kind words. Feel free to discuss and hope for the development of cooperation.

Best wishes,

Dariusz Prokopowicz