Post­cri­sis Lessons

Beijing Review - - EDITOR’S DESK -

Ten years have passed since the in­ter­na­tional fi­nan­cial cri­sis erupted in the United States in 2008. The in­ter­na­tional econ­omy is still ex­pe­ri­enc­ing a postcri­sis era of slow re­cov­ery. The fi­nan­cial cri­sis, which spurred ma­jor de­vel­oped coun­tries to nar­row mar­ket ac­cess, also de­terred eco­nomic glob­al­iza­tion and weak­ened driv­ing forces for the re­cov­ery of the in­ter­na­tional econ­omy. Against such a back­drop, China’s ef­forts to up­hold eco­nomic glob­al­iza­tion to draw lessons from the in­ter­na­tional fi­nan­cial crises, pre­vent do­mes­tic fi­nan­cial cri­sis and pro­pel the re­cov­ery of the global econ­omy are sig­nif­i­cant.

The fi­nan­cial in­dus­try is the lifeblood of mod­ern eco­nomic de­vel­op­ment. China has ex­pe­ri­enced two ma­jor fi­nan­cial crises—the Asian fi­nan­cial cri­sis in 1997 and the in­ter­na­tional fi­nan­cial cri­sis in 2008— which left no over­whelm­ing im­pacts on China. How­ever, the eco­nomic sys­tem of the coun­try is not ut­terly im­per­vi­ous to fi­nan­cial crises. China’s fi­nan­cial mar­ket has been fur­ther opened up and the ren­minbi more in­ter­na­tion­al­ized, mak­ing the fi­nan­cial in­dus­try in­creas­ingly global while also ex­pos­ing it to crises. There­fore, prevent­ing and dis­solv­ing fi­nan­cial risks were listed as a pri­or­ity task at the 19th Na­tional Congress of the Com­mu­nist Party of China.

Viewed from a global per­spec­tive, the in­ter­na­tional com­mu­nity has greatly changed global fi­nan­cial reg­u­la­tory rules so as to pro­mote the sta­ble and sound de­vel­op­ment of fi­nan­cial sys­tems, solve prob­lems ex­posed by fi­nan­cial crises and pre­vent the re­cur­rence of sim­i­lar crises, a process where rules have been im­proved and re­vised. Apart from con­tribut­ing to the im­prove­ment of in­ter­na­tional fi­nan­cial reg­u­la­tory rules, China needs to pro­vide in­sti­tu­tional ref­er­ences. The in­ter­na­tional com­mu­nity can also draw ref­er­ences from Chi­nese fi­nan­cial sys­tems in terms of preven­tion and coun­ter­mea­sures against crises.

In the past decade, China’s fi­nan­cial in­dus­try has un­der­gone re­forms partly gen­er­ated by the need to adapt to the de­vel­op­ment of glob­al­iza­tion as well as pre­vent and dis­solve fi­nan­cial risks. View­ing changes in the post-cri­sis fi­nan­cial sys­tem from the per­spec­tive of fi­nan­cial re­forms, the cur­rent de­vel­op­ment of the fi­nan­cial sys­tem and in­flu­en­tial fac­tors, there are ques­tions such as whether depend­ing too much on cap­i­tal reg­u­la­tion ac­cord­ing to the Basel Ac­cords is a right choice and whether risk mea­sure­ments are gen­er­ally un­der­es­ti­mated. In­dus­try in­sid­ers are ex­pected to ex­plore the progress made and prob­lems that may still loom in terms of fi­nan­cial reg­u­la­tion re­forms im­ple­mented since the fi­nan­cial cri­sis 10 years ago.

As a Chi­nese say­ing ad­vises, “Don’t leave your rain­coat at home on sunny days.” Al­though con­clu­sions can be drawn from crises, rel­e­vant sec­tors need to un­der­stand the fea­tures of fi­nan­cial sys­tems be­fore­hand and take mea­sures to pre­vent and re­duce pos­si­ble crises.

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