Tag Archives: financial

Open democracy on the financial crisis – the end of American capitalism?

openDemocracy on the global financial crisis of 2007-08:

Saskia Sassen, Globalisation, the state and the democratic deficit” (18 July 2007)

Tony Curzon Price, “The end of gentlemanly capitalism” (13 August 2007)

Robert Wade, “The financial crisis: burst bubble, frayed model” (1 October 2007)

Avinash D Persaud, “The dollar standard: (only the) beginning of the end” (5 December 2007)

Fred Halliday, “Sovereign Wealth Funds: power vs principle” (5 March 2008)

Willem Buiter, “The end of American capitalism (as we knew it)” (17 September 2008)

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Filed under Capital markets, capitalism, finance, Multilateral Institutions

Pakistan: IMF Programme needs to be debated

Raza Rumi’s oped published in the NEWS (Pakistan)

The not-so-inevitable is about to happen. After weeks of groping in the darkness of global financial mess, the Pakistani government is negotiating with the International Monetary Fund. Admittedly, Pakistan’s options are limited, given its intractable dependence on oil imports for survival. The civilian government moving from one crisis to another has elevated indecision to a policy status. This does not imply that we start echoing the unwise cacophony of impatience with an elected and far more legitimate government than the eight-year-long authoritarian regime. But then who cares: if recent history is a guide, PPP governments come with a brand or at least get branded as incompetent comprising coteries of cronies, as if the rest of the country is a fair, rule-based haven.

The plain truth is that the power-wielders of Pakistan have been following a set of disastrous policies for decades that have now put the survival of the state, or as we knew it, in question. From the great hunts for strategic depth and Jihad, and from nurturing domestic oligarchies and pampering a delinquent industrial sector at the expense of land tillers and equitable irrigation, we are now paying the price for policy making by the elites for the sustenance of the elites. Continue reading

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Filed under Aid, IFIs, International Aid, Pakistan, Poverty

Financial Crises, Global Capital Flows and the International Financial Architecture

The recent upheavals in the world financial markets were quelled by the immediate intervention of both international financial institutions such as the IMF and of domestic ones in the developed countries, such as the Federal Reserve in the USA. The danger seems to have passed, though recent tremors in South Korea, Brazil and Taiwan do not augur well. We may face yet another crisis of the same or a larger magnitude momentarily.

What are the lessons that we can derive from the last crisis to avoid the next? Continue reading

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US congressman: “If we don’t pass this bill, we’re going to have martial law in the United States”

By Tom Eley writing at WSS

(3 October 2008)

In the wake of Monday’s vote in the US House of Representatives rejecting the $700 billion bailout package for the American financial industry, prominent voices in the US and international media have responded by denouncing the lower house of Congress and complaining that the American political system is too susceptible to popular opinion and insufficiently obedient to the will of the corporate and political elite.

The yearning for more authoritarian forms of rule was expressed by, among others, Michael Gerson, the former chief speechwriter for George W. Bush. In a column in the Washington Post, he complained, “[I]t is now clear that American political elites have lost the ability to quickly respond to a national challenge by imposing their collective will.” The Times of London, part of Rupert Murdoch’s media empire, was even more blunt, headlining a column, “Congress is the Best Advert for Dictatorship.” Continue reading

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Filed under Capital markets, capitalism, finance, United States

Financial Problems, Global Properties Flows along with the International Monetary Architecture

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The fresh upheavals in the world financial trades were quelled by the on the spot intervention of both international economic institutions corresponding to the IMF and of domestic ones in the stepped forward realms, corresponding to the Central Store in the USA. The peril appears to pass through excel, although new tremors in South Korea, Brazil and Taiwan do not augur in any case. We may face expression still an additional catastrophe of identical or a larger magnitude momentarily.

Anything are the lessons that we may possibly derive bask in the preceding misfortune to steer clear of succeeding?

The foremost lesson, it may perhaps seem, is that brusquest word furthermore long time properties flows are two unconnected phenomena with absolutely trivial in general. The past is speculative in addition to technical in personality and has extremely trivial to do with central experiences. The latter is investment oriented plus dedicated to the going up of the welfare and quality of its current dwelling house. It is, thence, wrong to bring up “global funds flows”. There are money (coupled with however durable portfolio money in addition to endeavor capital) – along with there is speculative, “scorching” money. While “warm wealth” is especially encouraging since a lubricant on the wheels of liquid capital markets in well to do realms – it can be shocking in less liquid, tender economies or in economies in transition. Continue reading

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‘Financial globalisation can reinforce Islamic finance’

KARACHI: Dr Shamshad Akhtar, Governor, State Bank of Pakistan (SBP), has said the Islamic financial services industry needs to consolidate itself to be able to better compete with global players through achieving scale efficiency and cost effectiveness in addition to rapidly building its capacities to standardise regulation, supervision and accounting practices, while strengthening the governance of the industry.

Delivering her keynote address as the Chairperson of the Islamic Financial Services Board (IFSB) on “Financial Globalization and Islamic Financial Services Industry” at the 5th Annual Summit of the IFSB held in Amman, Jordan, Dr Akhtar said the Islamic financial services industry has been transformed from being a peripheral activity to a sizeable industry which is attracting global interest.

She said financial globalization would foster this industry and given the inherent features and richness of Islamic principles, modalities and products’ growth, it would be beneficial for supporting the process of regional and global financial deepening. Although currently the size of the industry is small relative to the global financial system, it has promising growth prospects, she added. Continue reading

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Filed under Capital markets, capitalism, finance, Globalization, Pakistan

Financial Liberalization and Crisis in the Age of Globalization

by Muzaffer Vatansever & Mustafa Kutlay (courtesy Turkish Weekly opinion)

“Periods of high international capital mobility have repeatedly produced international banking crises, not only famously as they did in the 1990s, but historically.” Reinhart and Rogoff[1]

 Globalization has turned out to be one of the most controversial topics of our time. It is almost impossible to conclude a debate without touching upon at least one aspect of globalization. Moreover, it is not an easy job to make a comprehensive and adequate definition of it that leads to overselling of this term. Notwithstanding the definitional ambiguity, there is more or less consensus on what economic globalization is: It briefly refers to the abolishment of customs and trade barriers, the surge in technological developments and knowledge, the widespread liberalization and integration of financial markets, and the movements in labour markets (Figure-1)

 Arguably, the most dynamic and unstable part of economic globalization is the financial side of the story. The recent financial crises have clearly demonstrated this fact, and proved that the deterioration in the financial system has the potential to plunge the overall economy into a crisis, per se. For instance, the perversion of the financial globalization had caused huge economic meltdown in Mexico and South Korea even these countries have solid macroeconomic fundamentals at the very beginning of the crises. For example, before the crisis in Mexico, the inflation fell from 130% in 1987 to 7% by 1994; economy was growing at an annual rate of 4.4%; while the government budget was -0.7%. The only problem was the current account deficit with 7.2% of GDP[2]. The uncontrolled and very fast liberalization of the Mexican financial system has paved the way to full-fledged financial crisis. These and the similar other crises brought up one important point into the agenda of world economy: What are the risks associated with capital market liberalization, and in which ways:  Continue reading

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