Publications - Working Papers IER SAS

New appearance of global financial system (selected context with polarization of wealth in globalized world)

Developments of the global financial system continue to show considerable signs of instability. The financial crisis has changed its character to crises of debts and economics. The resulting problems are solved by issuing new debts and building supportive and rescue mechanisms of mutual guarantees, which only delay true solution of the problem. It is possible to talk about manipulation on the stock markets; we are witnessing the instability of exchange rates and internal instability of sovereign states. There are presented specific risk factors in Spain, China and Japan. Developments on the bonds market are alarming; it is possible to expect destruction of capital and people’s savings. In the medium-term, the winners and leaders in the new financial architecture of world will be the states, which will keep their competitive advantage, ability of raising capital and the ability of allocating this capital into real assets. For the winners we can already consider states, whose sovereign funds expand in spite of the present situation.