scholarly journals Inflation and Hyperinflation Countries in 2018–2020: Risks of Different Assets and Foreign Trade

2021 ◽  
Vol 14 (12) ◽  
pp. 618
Author(s):  
Olli-Pekka Hilmola
Keyword(s):  
Foreign Trade ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Financial Policy ◽  
Product Availability ◽  
High Inflation ◽  
Us Dollar ◽  
The Global Financial Crisis ◽  
Market Indexes ◽  
Special Circumstances

Since the global financial crisis (2008–2009), central banks and governments in developed countries have relied upon loose monetary and financial policy. In the coronavirus pandemic era, these policies were taken even more to the extreme. In 2021, countries around the world started to experience product availability issues, and inflation in some cases was extremely high. There has been debate about the possibility of persistent high inflation. However, risks to assets and foreign trade in this new situation are unknown as all important hyperinflation cases are from decades to century-old. It is important to know what kind of implications high inflation has on modern economies. Therefore, in this study, 10 countries with the highest inflation were selected to be examined in the period of 2018–2020. In these countries, currencies lost a considerable amount of their value against US dollar in 2018–2020. Stock market indexes in many cases provided very high returns in local currency terms; however, against the US dollar, the index yield changed for the substantially negative. Apartment prices in general declined as well. In foreign trade, imports generally declined, while exports were mixed or even increased. However, it should be noted that all of these observations are influenced by the pandemic era and special circumstances of a particular country.

scholarly journals The World Financial Crisis and The Polish Economy

2019 ◽  
Vol 19(34) (1) ◽  
pp. 5-21
Author(s):  
Mieczysław Adamowicz ◽  
Tomasz Adamowicz
Keyword(s):  
Financial Crisis ◽  
Financial Institutions ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Financial Policy ◽  
The European Union ◽  
The World ◽  
The Subject ◽  
Polish Economy ◽  
The Global Financial Crisis

The subject of the work is to provide an overview of the global financial crisis in the years 2007-2011; its course, symptoms and effects in the world and in Poland. The work presents the causes and the sources of crisis as well as corrective measures taken by governments and financial institutions. The subject literature and information from different national and international financial institutions and organisations were used as a source of research materials and data for analysis. The financial crisis appeared in Poland with some delay and was less intensive than in other developed countries. Anti-crisis measures taken in Poland complied with the recommendations of the European Union and the International Monetary Fund. The measures taken by the Polish central bank concerned the institutional sphere, the manner in which the financial policy worked and how it was pursued, as well as the real sphere of the economy, including especially enterprises, households and public institutions.

scholarly journals Cointegration of Stock Market and Exchange Rate in Indonesia

2019 ◽  
Vol 2 (2) ◽  
pp. 125 ◽  
Author(s):  
Pribawa E Pantas ◽  
Muhamad Nafik Hadi Ryandono ◽  
Misbahul Munir ◽  
Rofiul Wahyudi
Keyword(s):  
Exchange Rate ◽  
Stock Market ◽  
Capital Market ◽  
Global Financial Crisis ◽  
The Us ◽  
Us Dollar ◽  
The Exchange Rate ◽  
Johansen Cointegration Test ◽  
The Global Financial Crisis

This study aims to determine the long-term relationship between stock market and exchange rate in Indonesia. The research method used is Johansen cointegration test. The results of this study found no cointegration between the variables tested. Thus the exchange rate, JII, and IHSG have no relationship in the long term. The fluctuation of the rupiah exchange rate in recent years did not generally affect the performance of stock indices especially after the global financial crisis of 2008. This shows the capital market in Indonesia has a good performance so that it is not so sensitive to the sentiment of the decline in the rupiah against the US dollar. This finding is in line with the findings of Syahrer (2010) which states the exchange rate has no effect on the stock market.

scholarly journals Would Macroprudential Regulation Have Prevented the Last Crisis?

2019 ◽  
Vol 33 (1) ◽  
pp. 107-130 ◽  
Author(s):  
David Aikman ◽  
Jonathan Bridges ◽  
Anil Kashyap ◽  
Caspar Siegert
Keyword(s):  
Financial Crisis ◽  
Financial Stability ◽  
Global Financial Crisis ◽  
Financial System ◽  
Mortgage Lending ◽  
Financial Policy ◽  
Policy Interventions ◽  
The Us ◽  
Set Up ◽  
The Global Financial Crisis

How well equipped are today’s macroprudential regimes to deal with a rerun of the factors that led to the global financial crisis? To address the factors that made the last crisis so severe, a macroprudential regulator would need to implement policies to tackle vulnerabilities from financial system leverage, fragile funding structures, and the build-up in household indebtedness. We specify and calibrate a package of policy interventions to address these vulnerabilities—policies that include implementing the countercyclical capital buffer, requiring that banks extend the maturity of their funding, and restricting mortgage lending at high loan-to-income multiples. We then assess how well placed are two prominent macroprudential regulators, set up since the crisis, to implement such a package. The US Financial Stability Oversight Council has not been designed to implement such measures and would therefore make little difference were we to experience a rerun of the factors that preceded the last crisis. A macroprudential regulator modeled on the UK’s Financial Policy Committee stands a better chance because it has many of the necessary powers. But it too would face challenges associated with spotting build-ups in risk with sufficient prescience, acting sufficiently aggressively, and maintaining political backing for its actions.

Risk governance and performance: a developing country perspective

2016 ◽  
Vol 31 (3) ◽  
pp. 250-268 ◽  
Author(s):  
Shamsun Nahar ◽  
Christine Jubb ◽  
Mohammad I Azim
Keyword(s):  
Significant Relationship ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Risk Governance ◽  
Bank Performance ◽  
Risk Disclosure ◽  
Content Type ◽  
Return On Equity ◽  
And Performance ◽  
The Global Financial Crisis

Purpose – The purpose of this paper is to investigate the association between risk governance and bank performance in a country where disclosure of risk information is virtually voluntary. Design/methodology/approach – Using 210 bank-year observations comprising hand-collected data for the period 2006-2012, the study uses regression analysis to test whether a significant relationship exists between risk governance and banks’ accounting- and market-based performance. Findings – This paper investigates risk governance in terms of risk disclosure, number of risk committees and existence of a risk management unit, controlling for other corporate governance variables. Accounting-based performance is measured by return on equity and return on assets; market-based performance is measured by Tobin’s q and buy-and-hold returns. The results show that there is a significant relationship between risk governance and bank performance measures used in this study. Research limitations/implications – This paper complements the governance literature by incorporating agency and neo-institutional theory to provide robust evidence that risk monitoring and management are associated with bank performance, which has become extremely important following the global financial crisis (2007-2008). Practical implications – Empirical evidence in this paper suggests that risk governance characteristics can be used as channels to improve bank performance. In addition, stakeholders may find these results useful in selecting their preferred bank. Originality/value – The uniqueness of this paper lies in its country setting. Most studies on governance and performance involve developed countries. This paper’s contribution is to examine the association of risk governance characteristics for both accounting-based and market-based performance in a developing economy setting, with virtually voluntary compliance mechanisms in place.

scholarly journals The impact of the global financial crisis on the structure of investment portfolios of insurance companies

2011 ◽  
Vol 56 (191) ◽  
pp. 143-161 ◽  
Author(s):  
Jelena Kocovic ◽  
Tatjana Rakonjac-Antic ◽  
Marija Jovovic
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Financial Institution ◽  
Developed Countries ◽  
Insurance Companies ◽  
Financial Health ◽  
Patterns Of Behavior ◽  
The Global Financial Crisis ◽  
Investment Portfolios ◽  
The Impact

This article deals with the impact of the global financial crisis on the scale and structure of investment portfolios of insurance companies, with respect to their difference compared to other types of financial institution, which derives from the specific nature of insurance activities. The analysis includes insurance companies? exhibited and expected patterns of behavior as investors in the period before, during, and after the crisis, considering both the markets of economically developed countries and the domestic financial market of Serbia. The direction of insurers? investments in the post-crisis period should be very carefully examined in terms of their future implications for the insurance companies? long-term financial health, and defined in a broader context of managing all risks to which they are exposed, taking into account the interdependence of these risks. Pertinent recommendations in this regard have arisen from research of relevant past experience and current trends, and also from an analysis and comparison of views on this subject presented by a number of authors.

scholarly journals ACCUMULATION OF CAPITAL IN VOLATILE MARKET CONDITIONS

2017 ◽  
Vol 19 (2(64)) ◽  
pp. 94-100
Author(s):  
N.I. Duchinska ◽  
J.N. Chayka
Keyword(s):  
Capital Accumulation ◽  
Large Scale ◽  
Global Financial Crisis ◽  
Import Substitution ◽  
High Standard ◽  
Developed Countries ◽  
Voluntary Association ◽  
Role Of The State ◽  
Positive Rate ◽  
The Global Financial Crisis

There are three stages of the process of capital accumulation in Ukraine. At the first stage there was a primary accumulation of capital. At this stage, the accumulation of capital was largely unearned and was not based on the voluntary association of private capital, but due to the policy and rapid dismantling of state-owned enterprises and the creation of various companies on their basis. Capital formation was carried out at the expense of the mechanism of large-scale and rapid redistribution of assets between industries and economic entities, as a result of the development of the principles of self-financing and self-financing, which began in the mid-80's of the twentieth century. The second stage is characterized by a positive rate of accumulation of capital. At this stage, the pace of GDP decline slowed down, and the pace of capital accumulation was positive. Positive features of the accumulation process were the global financial crisis of 1998. Due to the rapid devaluation of the hryvnia, the position of national producers strengthened and the domestic consumer market expanded significantly, and the process of import substitution began. At the third stage, negative rates of accumulation were noted. Assessing the influence of domestic mechanisms of accumulation and overflow of capital on the peculiarities of the development of the domestic economic structure, it is necessary to note the rather high standard of gross fixed capital accumulation, which fluctuates within the limits of 20 - 25%. Despite the fact that the indicators for the formation and use of gross and net savings in Ukraine correspond to the proportions inherent in developed countries, the domestic economy is constantly experiencing a lack of investment, which is explained by the inadequate motivation of investors to implement large-scale investment and innovation projects, the ineffectiveness of the national system of transformation of savings in investment and Needs to improve the mechanisms of accumulation and overflow of capital and increase the role of the state in stimulating this process .

scholarly journals The Impact of the Global Financial Crisis on the Co-Integration Relationship between Reit and Stock Markets: A Dynamic Co-Integration Approach

2017 ◽  
Vol 9 (7) ◽  
pp. 86
Author(s):  
S. Aydin Yüksel ◽  
Asli Yüksel ◽  
Ümit Erol ◽  
Hakki Öztürk
Keyword(s):  
Financial Crisis ◽  
Stock Markets ◽  
Structural Breaks ◽  
Global Financial Crisis ◽  
Main Tool ◽  
Developed Countries ◽  
Integration Approach ◽  
Variable Nature ◽  
The Global Financial Crisis ◽  
The Impact

The aim of this paper is to analyze the impact of the Global Financial Crisis (GFC) on the co-integration relationship between the REIT and stock market indices using a sample of 10 developed countries. The main tool employed for this purpose is the dynamic co-integration approach. The empirical results strongly suggest that the stock and REIT markets were deeply affected by two successive crises. The first crisis was related to the U.S. subprime problems while the second shock emanated from the European insolvency problems. The shocks led to serious structural breaks in the financial data during the 2007-2012 period. As a result of this and the highly variable nature of the co-integration structure during this period, the conventional and static Johansen tests cannot detect the strong co-integration between the REIT and stock markets which were the result of common negative response of both markets to the successive shocks. Dynamic co-integration approach seems to be a more valid tool to capture the dynamics of the co-integration structure after the GFC. The dynamic approach implies that the destruction of diversification benefits between the REIT and stock markets was essentially a shock related outcome which also implies that the diversification potential between these two markets may still be valid in the absence of shocks.

The politics of creditworthiness: political and policy commentary in sovereign credit rating reports

2020 ◽  
pp. 1-24
Author(s):  
Zsófia Barta ◽  
Kristin Makszin
Keyword(s):  
Credit Rating ◽  
Global Financial Crisis ◽  
Developed Countries ◽  
Sovereign Credit ◽  
Policy Choices ◽  
Sovereign Credit Ratings ◽  
Standard And Poor's ◽  
Common Notion ◽  
The Global Financial Crisis ◽  
Lower Uncertainty

Abstract How much do politics and politically sensitive policy choices matter for sovereign credit ratings? We contend that while policy is consistently important for rating decisions, attention to politics varies with perceived uncertainty. Quantitatively analysing the text of 635 sovereign rating reports issued by Standard and Poor’s (S&P) between 1999 and 2012 for 40 European countries, we find that S&P scrutinises policy with similar intensity across countries, but political scrutiny was less intense in developed countries and prospective European Union members (categories formerly associated with lower uncertainty) than in emerging countries until the crisis dispelled illusions of lower uncertainty in these categories. Our findings nuance the common notion that financial market actors allow countries perceived to belong to low-risk categories more “room-to-move” in their political and policy choices, by showing that in rating decisions such permissiveness only applied to politics – but not to policy – and it ended with the global financial crisis.

scholarly journals Modeling Outcomes of Unconventional Monetary Policy

2019 ◽  
Vol 8 (4) ◽  
pp. 10263-10268
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Global Financial Crisis ◽  
Consumer Price Index ◽  
Developed Countries ◽  
Central Banks ◽  
Unconventional Monetary Policy ◽  
The Us ◽  
The Developed Countries ◽  
The Global Financial Crisis

The paper presents a study of the outcomes of the unconventional monetary policy methods that the central banks of developed countries have been applying during and after the global financial crisis. Before the crisis central banks used the interest rate policy as their main tool. But the recent financial crisis has demonstrated the inefficiency of traditional methods (especially after the base interest rate has reached zero). Therefore in response to the global financial crisis, central banks of many countries have taken unconventional measures to overcome the crisis. The paper aims to study the main outcomes of unconventional monetary policy measures of the developed countries and formulate the recommendations for the developing countries. The following objectives are being met in the paper:to reveal the essence of the main mechanisms for implementing the unconventional monetary policy; to evaluate the efficiency of unconventional monetary policy in the US, Japan, United Kingdom;to model the impact of monetary policy of the European Central bank on the consumer price index in the Eurozone countries. Research methods: method of comparative analysis is usedto evaluate the efficiency of the unconventional monetary policy in the US, Japan, European Union and the United Kingdom.The model of themonetary policy impact on the consumer price index is based on econometric analysis and is constructed using the least squares method. The studied model includes both traditional and non-traditional methods.Observation period - quarterly data from 1999 to the second quarter of 2019. The results of the analysis show that unconventional monetary policy methods of the central banks of the developed countries reached major goals - to prevent bankruptcies of large financial institutions in national economies. Moreover, the results of the suggested model show that the European Central Bank policy has also reached its inflation target that supposed to stimulate economic growth; the most significant effect is observed in the first years after the launch of an unconventional monetary policy. At the same time the unconventional tools of monetary policy stimulate the extreme increase of the securities prices, which led to the “overheating” of the US stock market and the EU national bonds markets with the negative yield on government securities of several countries, which may become a trigger for a new global crisis in the future. The result of the analysis of monetary policy in Ukraine shows the limitations of the use of non-traditional measures for the developing countries.

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