Global imbalances and dynamics of international financial markets

摘要

The recent global financial crisis (GFC) that took place in the period 2008-2009 had led to significant asset rebalances and generated considerable losses in the world's banking and financial sectors. This crisis is commonly viewed by the actors in the financial community as an exceptional risk episode, next to the Great Depression of the 1930s. It forced governments around the world to undertake vast programs of economic and financial restructuring and regulatory reforms.1 Five main lessons can be learnt from the GFC that should help in dealing with future crises and economic recessions. First, major financial crises are hard to deal with and have lingering consequences for all aspects of the real economy. Second, the very controversial "too big to fail" argument is no longer valid. The collapse of Lehman Brothers was an example that big financial institutions may be forced to bankruptcy as they exhibit great systemic risk. Third, the increased financial and trade globalization has brought the world's markets closer together, causing structural changes and significant systematic and contagious credit and market risks that were not well understood before the crisis. Fourth, the complexities of financial markets and financial innovations have brought to the fore the need for more market reforms and regulations to cope and prevent future financial crises and achieve more financial stability. Finally, altogether the crisis and the consequent structural changes and risk spillovers have required more accurate market risk modeling and assessment as the commonly-used financial models failed to predict the crisis, and capture the complex effects resulting from the new changes.