The financial crisis we are seeing with astonishment and with growing concern for some months now it was announced by various signals (ignored) of failure and collapse has highlighted the inadequate methods of market regulation that have proven ineffective and bisognevoli for radical reforms. Understand the consequences and develop a more regulated market model that eradicates the root of the phenomena sott'accusa of modern finance is a complex process. To tackle such a sensitive issue and develop some critical points of these dynamics we get help from an expert, Andrea Di Stefano , director of the monthly economic and ethical finance "Values", editor of "Business and Finance" and collaborator Radio Popolare to speak out on economic matters.
Most of the media, dealing with the financial crisis, has focused its attention on the bankruptcy of large banks on financial losses and layoffs on excellent. In short, Instead, they asked who I'm really lost and the categories within the company, will pay the highest price of this very heavy crises.
A first American taxpayers will pay, since, as is being looked forward to the bailout plan, an operation will be borne by public finance, an increase of U.S. debt and a total cost that was estimated at $ 2,800 for each U.S. citizen.
stay in the U.S. must also consider several million people (something like 5 million with margins rising) which had fallen in offering deliberately false and misleading information in terms of ease the loan and now have lost their hopes of having their own home.
pay workers because this crisis leads to the loss of jobs from the finance sector: a large part of the great managers and brokers is estimated half a million jobs lost in the financial industry globally.
Alongside this, however, we could add the dynamic consequences of a difficult to control and which could involve all the major car manufacturers selling arrangements that have adopted over the past 15 years with a strong financial profile, and the card industry credit, as is known, is considered one of those most at risk. In addition
that these are the people most directly affected must not forget the secondary effects of the crisis and the recession it triggered mechanism (which in itself is not rooted in specific structural reasons such as to cause such disruptive effects): loss of jobs Further, the rate of unemployment in the United States is at a peak and contagion of the crisis to a part of Europe. Surely England is the other side of the coin of the Anglo-Saxon model and the financial industry today and was dethroned after the success of the boom began with the deregulation of the late 80's characterized by the uncontrolled proliferation of financial products, often so abstruse, complex and engineered as to be incomprehensible to the same loans. We must not forget Spain, who had married more than any other model of growth based on the real estate boom, perhaps overtaking on Italy in the same lot has been spoken in recent months is nothing but a deflating bubble that threatens to make big damage to the economy
nasty surprises we can expect in the future to the system of pension funds having been transferred to a high proportion of savings of individuals from public to private pensions with the aim to be devoted to financial markets if they collapse in many portfolios, pension funds suffered significant losses.
Faced with a crisis so great as were the interventions implemented by governments and central banks? Adequate?
Most probably argue that there was no alternative to the plan devised by Paulson to the rescue. But this is a wrong answer: the sub-prime crisis to date are in fact the past 13 months and it was evident early on that the "five of Wall Street" were in difficulty. Emerges in this period of time, lack of role of the regulator, as always happens in finance speed, clarity and effectiveness of interventions are critical. Drag the crisis for 13 months was a bad choice, the interventions made so far were not incisors, were all measures-buffer. The only real action has made them when the ECB raised to 12% discount on products at risk by forcing the system to raise the levels of protection and assurance.
The dimensions of the crisis are so important and the budget hole so great that not even an option to exit from the crisis with the usual conflict seem to be viable: it seems rather emerge as an epochal event that redistributes the logic of power to escape once the United States 'hegemony on the financial market.
In light of the mistakes made so far in the future and what would be the best strategies to prevent crises of this kind?
Looking back at the first signs of the crisis was supposed to be an international authority and sovereignty of market regulation with powers of regulation, transparency requirements and very strong with the ability to develop action plans to bring back progressively control the markets are not controlled. For example
OTC market (OTC), which can suddenly stop because the size of those markets are now huge, one could envisage the establishment of a staff of emergency over a few months would dictate new rules transparency on the OTC market and the same is true for the derivatives or options. Other
interventions such as that of a few days ago with the SEC that provides overnight ban on short selling for 4 months on more than 450 titles on Wall Street playing inconsistent with the permissiveness with regard to short selling and hedge funds, instruments for years subject of criticism ever met. A concerted action by central banks and regulatory authorities to coordinate an intervention strategy to bring under control the markets in crisis therefore seems to be more desirable.
From political point of view and in the future you can claim a number of measures to combat speculation: the apparent price rises on commodities show that it is essential to nip the speculation in the markets for options on raw materials. If we take oil, for example, there are no objective reasons for such marked fluctuations in market determines the price per barrel: an effective tool toward this behavior is certainly taxation, not so much as to get additional resources to carry out and transparency in the conduct of operators and the size of speculation.
We could then work towards more transparency, not to prohibit but to force the declaration of some market transactions, as may be required for the OTC to make less obscure terms of the contracts because they know that even the international bodies what happens in these types of markets. Still, the obligation to have information on the strength of the counterparty and the raising of thresholds
Finally, considering the market of derivatives and options, it is not enough to condemn its function per se is not sick and even has its own logic. The problem arises when it is abandoned and the only philosophy is to create products just for financial movements and a further item of income for those working in that sector. Even in this case would be desirable to increase the thresholds for workers on the basis of paid-up capital.
Giandomenico Potestio
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