Series:Financia ASERS Collection

Financial Aspects of Recent Trends in the Global Economy - Volume I

Financial Aspects of Recent Trends in the Global Economy - Volume I

Author(s): / Language(s): English

Keywords: globalisation; financial market; financial crisis; global imbalances; debt constrains; exchange rates arrangements

Current global financial and economic crisis represents one of the key areas of policy makers as well as academics discussions. Together with debt crisis they may be considered as one of the most crucial challenges that official authorities are facing over the past few decades. Crisis period focused attention of economists to various areas of the financial aspects of recent trends in the world economy in the new global era. Financial liberalization together with the process of growing financial integration among countries in global content significantly contributed to rapid increase in the financial dependence of national financial markets. Intensification and internationalization of financial transactions, financial innovations and rising strength of financial institutions accelerated growing potential of the financial sector. It is not surprising that nowadays daily turnover in financial transactions significantly exceeds daily turnover in trade all over the world. As a result overall impact of financial sector activities on the real economy markedly increased over last few decades. Finally, a rising demand for more effective regulation of national financial sectors and international financial transactions seems to be a convenient way that policymakers suggest as the appropriate solution for current global financial challenges. Within this context we also point to an increasing relevancy of voices calling for new arrangement of international monetary system.Increased uncertainty considerably reduced allocation effectiveness of the financial markets during the crisis period. While the interest rates during the recession period generally decreased, costs of lending increased mostly for highly indebted countries. Economic crisis emphasized another crucial aspect of the current development in the world economy generally known as debt financing of economic growth and related negative trend in public debt development. Particular problems in the most indebted Eurozone countries affected not only stability of the euro exchange rate but also became the main reason for accelerating the process of fiscal unification, banking union formation and key adjustments in Eurozone stabilization mechanisms. As a result the pressures to strengthen financial discipline of the Eurozone member countries increased while the alternative scenarios of Eurozone reconstruction remained still alive (i.e. national bankruptcy, fiscal union). Another problem partially related to the current debt crisis represents a significant growth of the corporate debt, also known as corporate funding crisis. Accumulation of corporate debt during last few decades together with slow post crisis recovery in the main world economy centers raises the risk of upcoming corporate insolvency wave as a result of the huge wall of maturing debt signalizing refinancing difficulties in credit markets in United States, Europe and Asia.The last problem we emphasize as a direct consequence of negative aspects of the current crisis period is related to the rising indebtedness of households. In many countries an individual insolvency still deserves not sufficient attention of official authorities. Personal bankruptcy as a complex consolidation procedure is also not adequately implemented in the national legislation especially in the less developed countries considering wide aspects of this process.

Financial Aspects of Recent Trends in the Global Economy - Volume II

Financial Aspects of Recent Trends in the Global Economy - Volume II

Author(s): / Language(s): English

Current global financial and economic crisis represents one of the key areas of policy makers as well as academics discussions. Together with debt crisis they may be considered as one of the most crucial challenges that official authorities are facing over the past few decades. Crisis period focused attention of economists to various areas of the financial aspects of recent trends in the world economy in the new global era. Financial liberalization together with the process of growing financial integration among countries in global content significantly contributed to rapid increase in the financial dependence of national financial markets. Intensification and internationalization of financial transactions, financial innovations and rising strength of financial institutions accelerated growing potential of the financial sector. It is not surprising that nowadays daily turnover in financial transactions significantly exceeds daily turnover in trade all over the world. As a result overall impact of financial sector activities on the real economy markedly increased over last few decades. Finally, a rising demand for more effective regulation of national financial sectors and international financial transactions seems to be a convenient way that policymakers suggest as the appropriate solution for current global financial challenges. Within this context we also point to an increasing relevancy of voices calling for new arrangement of international monetary system.Increased uncertainty considerably reduced allocation effectiveness of the financial markets during the crisis period. While the interest rates during the recession period generally decreased, costs of lending increased mostly for highly indebted countries. Economic crisis emphasized another crucial aspect of the current development in the world economy generally known as debt financing of economic growth and related negative trend in public debt development. Particular problems in the most indebted Eurozone countries affected not only stability of the euro exchange rate but also became the main reason for accelerating the process of fiscal unification, banking union formation and key adjustments in Eurozone stabilization mechanisms. As a result the pressures to strengthen financial discipline of the Eurozone member countries increased while the alternative scenarios of Eurozone reconstruction remained still alive (i.e. national bankruptcy, fiscal union). Another problem partially related to the current debt crisis represents a significant growth of the corporate debt, also known as corporate funding crisis. Accumulation of corporate debt during last few decades together with slow post crisis recovery in the main world economy centers raises the risk of upcoming corporate insolvency wave as a result of the huge wall of maturing debt signalizing refinancing difficulties in credit markets in United States, Europe and Asia.The last problem we emphasize as a direct consequence of negative aspects of the current crisis period is related to the rising indebtedness of households. In many countries an individual insolvency still deserves not sufficient attention of official authorities. Personal bankruptcy as a complex consolidation procedure is also not adequately implemented in the national legislation especially in the less developed countries considering wide aspects of this proces

Challenges to Financial Stability – Perspective, Models and Policies - Volume I - A Framework for Modeling Systemic Risk Drivers of Different Markets

Challenges to Financial Stability – Perspective, Models and Policies - Volume I - A Framework for Modeling Systemic Risk Drivers of Different Markets

Author(s): / Language(s): English

Keywords: banking stability; financial safety; financial crisis; economic depression

During the global financial crisis exchange stock markets fell by more than 40% in Europe, USA or Japan. Real economy stopped, which was seen in international trade, direct investments and industry. These declines illustrate the scale and impact of systemic risk and its local and global consequences. In response, international supervisory and regulators have identified causes of the global financial crisis and took necessary steps to create stability of financial system, discipline in risk-taking, leverage and management of systemic risk. At the present, the global economy is facing some critical factors - supervisory improvement to minimize the risk and its impact of economy and simultaneously market participants examine the multi-faceted nature of regulation. The question is how to make sure that regulation are suitable for potential risk exposure and appropriate to financial institutions capitalization? The other topic is measures of systemic risk factors associated funding, profitability and bank liquidity through stress testing and economic analysis. What is the current level of systemic risk in the global financial system? The increased complexity of financial markets is a relatively new challenge that requires a fundamental shift in our thinking with respect to risk measurement. But we cannot manage what we do not measure. It is unlikely that a single measure of systemic risk will suffice. We anticipate that the variety of inputs ranging from financial stability, liberalization, concentration, and connectedness will all be revealing. Meaningful measurement requires a clear definition of systemic risk and thoughtful modeling of it. There are three major components to the challenge of monitoring systemic risk: the availability of data, modeling and measurement. Practical aspects of monitoring of systemic risks are, therefore, high on the policy of regulatory and supervisory community. Meet to this crucial problems regulators discuss aspects of macro-prudential frameworks, including Basel III capital buffer and monitoring of financial systems in order to detect vulnerability signs. Last years, policy makers, regulators and academics have been exploring questions related to financial stability, systemic risk and regulation. Thus, the goal of this book -Challenges to Financial Stability - Perspective, Models and Policies - is to encourage the exchange of new ideas about challenges in global trends in finance in the view of wide aspects of current critical perspective of financial system evolution. This special book addresses answers of these difficult questions. The target audience for this publication is academics, researchers and policy makers engaged in various disciplines such as evolution of the financial system, empirical financial analysis, macro and micro economic, including banking, currency and capital market, financial market liberalization and regulation, risk measurement & management. I expect that this special book will shed light on some of the challenges to stability of global financial system. The book consists of 19 chapters that are organized in 2 volumes - I. A Framework for Modelling Systemic Risk Drivers of Different Markets; II. Towards the Financial Stability -Macroprudential Policy and Perspective.

Challenges to Financial Stability -Perspective, Models and Policies - Volume II - Towards the Financial Stability -Macroprudential Policy and Perspective

Challenges to Financial Stability - Perspective, Models and Policies - Volume II - Towards the Financial Stability -Macroprudential Policy and Perspective

Author(s): Renata Karkowska / Language(s): English

Keywords: financial stability; macro-prudential policy; banking, regulation; foreign direct investment

During the global financial crisis exchange stock markets fell by more than 40% in Europe, USA or Japan. Real economy stopped, which was seen in international trade, direct investments and industry. These declines illustrate the scale and impact of systemic risk and its local and global consequences. In response, international supervisory and regulators have identified causes of the global financial crisis and took necessary steps to create stability of financial system, discipline in risk-taking, leverage and management of systemic risk. At the present, the global economy is facing some critical factors - supervisory improvement to minimize the risk and its impact of economy and simultaneously market participants examine the multi-faceted nature of regulation. The question is how to make sure that regulation are suitable for potential risk exposure and appropriate to financial institutions capitalization? The other topic is measures of systemic risk factors associated funding, profitability and bank liquidity through stress testing and economic analysis. What is the current level of systemic risk in the global financial system? The increased complexity of financial markets is a relatively new challenge that requires a fundamental shift in our thinking with respect to risk measurement. But we cannot manage what we do not measure. It is unlikely that a single measure of systemic risk will suffice. We anticipate that the variety of inputs ranging from financial stability, liberalization, concentration, and connectedness will all be revealing. Meaningful measurement requires a clear definition of systemic risk and thoughtful modelling of it. There are three major components to the challenge of monitoring systemic risk: the availability of data, modeling and measurement. Practical aspects of monitoring of systemic risks are, therefore, high on the policy of regulatory and supervisory community. Meet to this crucial problems regulators discuss aspects of macro-prudential frameworks, including Basel III capital buffer and monitoring of financial systems in order to detect vulnerability signs. Last years, policy makers, regulators and academics have been exploring questions related to financial stability, systemic risk and regulation. Thus, the goal of this book -Challenges to Financial Stability - Perspective, Models and Policies - is to encourage the exchange of new ideas about challenges in global trends in finance in the view of wide aspects of current critical perspective of financial system evolution. This special book addresses answers of these difficult questions. The target audience for this publication is academics, researchers and policy makers engaged in various disciplines such as evolution of the financial system, empirical financial analysis, macro and micro economic, including banking, currency and capital market, financial market liberalization and regulation, risk measurement & management. I expect that this special book will shed light on some of the challenges to stability of global financial system. The book consists of 19 chapters that are organized in 2 volumes: Volume I - A Framework for Modelling Systemic Risk Drivers of Different Markets and Volume II - Towards the Financial Stability – Macroprudential Policy and Perspective.

The Euro Area and the Economic Crisis

The Euro Area and the Economic Crisis

Author(s): Rajmund Mirdala / Language(s): English

Keywords: Euro-Area; crisis; competitiveness;

The books in these collections are based on relevant, authoritative and thought-provoking chapters written by experts to meet the requirements of executives, research scholars, academicians and students of master programs. Anonymous peer reviewers selected by the publisher provided many helpful comments and suggestions during the preparation of the manuscript for this book. They have also furnished a general assessment of the book's approach, coverage, organization, writing style and competitiveness.…..