Predicting exact time is almost impossible, but my short answer would be yes, or probably yes. The reason is taht interest rates has been too low for too long. As a result, asset prices (equities, real estate) are too high, and therefore more prone to rapid downwards movements.

I think this is largely speculative and has no real basis.

I support peter’s answer. This is definitly a fundamental motive which increases the chances for a capital market crisis. Generally, and among the rest, the capital market starts to realize that future interest would probably be higher, and therefore we can observe nowadays the uncertainty and volatility increase. As to when, this is always the gold question which demonstrates the idea of risk which cannot be diversified or accurately forecasted

Dear Md Iltemas Amin Adee,

Thank you very much for asking this very important question.

Thank you very much for making very important inquiries on the Research Gate portal and inspiring important discussions on particularly important issues.

In my opinion, it is good that there was a discussion in the question of this query.

This is a very interesting and scientifically important topic.

Question:

Why is a financial crisis expected by 2020?

this is a very important issue that requires scientific research.

It seems to me that it is good that there was a discussion in the question of this question.

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 wish you all good and best regards

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.

I invite you to the discussion.

The above question 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.

I invite you to the discussion.

In the context of the above considerations, the following question is also current:

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 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.

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 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

I am not an economist but the high rate of loan contracts and the fraudulent proposals for their use by some African countries only spell down doom in the year 2020!

Because the roots of the old financial crisis have not been eliminated yet.

Thank you everyone for your answers, its good to have different views to the same problem

There is no real basis.

Dariusz Prokopowicz Thank you so much for all these inputs. I may not be able to add much to your discussions but I would love to share my personal research and opinion on these matters.

Dariusz Prokopowicz

I totally agree. Bank lobbying is a huge issue. Bad loans are a common problem, specially in developing countries with higher corruption. For example, countries such as Bangladesh (my home country) government should definitely strengthen their laws on loans. Bad loans not only create unsustainable growth but at the same time reduces chances (by increasing interest rates for good loans) of sustainable growth.

Additionally I believe state intervention tends to fail a lot of times due to biases. Decisions tend to be politically driven as well, not totally addressing the problems. Such human behavior makes it impossible for economist to predict or solve such global issues as the financial crisis, and makes it quite impossible to predict them.

Resource scarcity is assumed in 1970 after that it is a cyclical process

REMEMBER 2000 or Y2K?

People made such a big deal of it by predicting that there will be worldwide chaos because computers will crash. the year 2000 passed; the prediction proved wrong. All problems solved. Now the year 2020; this is the same attention grabbing issue. Economists' forecast is as good as the future reading by fortune teller. Economist known much about the past, but despite all the impressive equations and modelings, we still saw crisis after crisis without any accurate predictions to help averting them. As for 2020, the vision of the same economists remain less than 20 / 20.

WHY ALL PREDICTIONS ARE NOT USABLE? Time series panel data, unit root testing, integration, etc. same old things for the past 40 years. What new knowledge had we added into the field of economics? Despite advances in computer science, digital technology and the availability of big data, economists are still working with 40 - 50 years old equation. The calculation speed moved from hand calculation to digital computation, but there is no theoretical breakthrough.

It will be interesting to see how economist use AI and huge data generated everyday to predict the economic cycle. I believe economists today or tomorrow will/have to update themselves

I read somewhere, from historical perspectives/trends, financial crisis came with almost common gaps of 12 years. Last was 2008.

I don't think so, such rumors and news are baseless.

I think that human behavior is the most difficult to predict, because we can see the trend of markets and decided, but the human is very difficult to perceive. the crisis of 2008 is a real illustration

Yes, I definitely agree. Human behavior is one of the major reasons for such crisis to occur, thus prediction is very tough.

That has no real basis. At most, human's best judgement. However, a period is a "financial crisis", only when we call it that way. My point is that the question cannot be answered without a proper objective definition of what a financial crisis is (compared to just a bad year).

In the Basel Accords' implied definition of "downturn" (99,9% VaR), the frequency of such crisis is once every 1000 years.

So: one year in an interval of 10 years will be the worst out of those ten. So you could call it a "financial crisis", if you want to.

You will always have "Judgement Day" callers. Most of these are speculations based on credit risk (which is incredibly high atm) and an inverted yield curve. Then again, It could be sooner or it could be later. Very hard to predict; you are better off hedging and move to a safe haven closer to the time period. You could lower your risk exposure since with current volatility, risk is being paid handsomely even at low exposure. Of course, as long as you are not required to beat some index with a high r/r history.

It's all about speculations, and the projections of such a financial crisis is determined by the interaction of different Financial/Macroeconomic factors. Among such factors the money supply i.e. the increase in supply of money faster than the growth in domestic output in some key nations,may lead to inflation and depressions in local currency.Further,other factor that can be considered the possibility of having trade disputes with other countries may slow economic growth.All in all,it's a huge issue which can be subject to a scientific research.