With the integration of China's financial system into the global financial system, any trouble from outside will have a great impact on China's financial system, and China's own financial system cannot avoid the risk of financial crisis.
In the past decade, the events that hurt the global economy the most were neither wars nor natural disasters, but financial crises again and again. In this decade, the major financial crises are Mexico financial crisis 1994 and Mexico financial crisis 1997- 1998.
Asian financial crisis in 2000, Russian financial crisis, Brazilian financial crisis1998 Turkish financial crisis in 2000, Argentine financial crisis 200 1.
A striking feature of several financial crises in the past decade is that most of them occurred in emerging market countries. These emerging market countries entered the global financial system earlier when the macroeconomic conditions were not yet mature and their currencies were freely convertible under capital account. Although economists and government officials generally believe that allowing capital to flow freely between countries is beneficial to debtor countries and the world economy, a large number of capital account liberalization has brought speculative foreign exchange transactions and banking crises. In some emerging market countries, once their currencies are attacked by international speculators, the exchange rate often falls first and the currencies depreciate sharply. Then, the banking industry encountered a crisis, and a large number of small and medium-sized banks closed down, which affected the whole society, causing its economic development level to retrogress, destroying many years of achievements, and even social unrest and political crisis in Indonesia and Argentina.
When China government realized RMB convertibility under current account at the end of 1996, it promised to realize RMB convertibility under capital account in 2000. It is precisely because the RMB is not freely convertible under the capital account that China has escaped the Asian financial crisis, and the tragic situation that Southeast Asian countries were ravaged by the financial crisis also made the China government deeply alert. Therefore, starting from 1998, strengthening financial supervision, cleaning up and rectifying illegal financial institutions and financial activities, and preventing and resolving financial risks have become the theme of China's financial industry. Among them, the big moves include rescuing the four state-owned banks, reshaping the whole trust industry, cleaning up and rectifying urban credit cooperatives and rural credit cooperatives, and cleaning up and canceling the rural "three meetings and one department".
After China's entry into WTO, China's financial industry will gradually open to the outside world, and RMB will gradually realize free convertibility under capital account. At this time, whether there will be a financial crisis in China in the next few years and how to deal with it are unavoidable problems. More and more government officials and scholars have deeply realized that the financial crisis will become the biggest danger and challenge for China's next economic development. In 200 1 year, China famous economists Qian Yingyi and Huang Haizhou pointed out in a research report submitted to the highest level that the probability of financial crisis in China in the next decade is almost 100%!
Apart from the Asian financial crisis around China, which has aroused widespread concern in China, the frequent financial crises in emerging market countries in recent ten years, from Mexican financial crisis to Russian financial crisis to Argentine financial crisis, have not attracted much attention from all walks of life in China. Academics realize that government officials are concerned about the Asian financial crisis, mainly by analyzing why the financial crisis occurred in Southeast Asian countries that created the "East Asian miracle" and whether China can avoid the contagion of the financial crisis in Southeast Asian countries. As soon as the Asian financial crisis ended, domestic financial problems and financial reforms became the focus of attention from all walks of life, but in-depth study of the financial crisis and how to prevent and manage it no longer attracted attention. In the eyes of many people, as long as China accelerates its financial reform, the financial crisis will be far away from China. In fact, with the integration of China's financial system into the global financial system, any trouble from outside will have a great impact on China's financial system, and China's own financial system cannot avoid the risk of financial crisis. Therefore, an in-depth study of the causes of the financial crisis, the relationship between the financial crisis and international capital flows, and the experience and practices of other countries and the International Monetary Fund in preventing and managing the financial crisis will play an important role in China's future response to the financial crisis.
Fortunately, the two latest masterpieces about financial crisis published in China, Financial Crisis, Liquidity and International Monetary System (by jean tirole) and Prevention and Management of Financial Crisis (by Barry Yi Chengrui), have made profound theoretical analysis and experience introduction on the financial crisis in the past decade and the countermeasures of governments and international organizations.
Faced with frequent financial crises in the past decade, many macroeconomists and international economists are thinking about the following questions: Is the financial crisis an unpleasant and inevitable by-product of complete capital account liberalization? Countries around the world should evolve into a * * * governance model, and the solution is frequent non-crisis events or local independent bond model, with few non-performance events? Can a better order (that is, liberalizing foreign direct investment and securities investment, and establishing a strong institution to carefully supervise financial intermediaries before the liberalization of short-term capital flows) prevent these crises? Should temporary or permanent restrictions be imposed on short-term capital flows? How do all these measures adapt to the choice of exchange rate system? Have these crises been properly handled? Should international financial institutions be reformed and how? Professor jean tirole, an economist, tries to answer these questions theoretically in Financial Crisis, Liquidity and International Monetary System.
Although economists have done a lot of fruitful research on the financial crisis, for a long time, economists have lacked a clear analytical framework for their theoretical analysis of the financial crisis. Tirole tried to establish a basic analytical framework for financial crisis research with the theory of "double agency" and "* * * same agency" in corporate finance. Tirole first analyzed the general views on the financial crisis and the reform of the international financial system. In his view, most reform proposals only pay attention to the appearance, fail to touch the essence of the problem, and fail to coordinate the conflict between establishing effective financing restrictions and ensuring the borrower's own reform. He stressed that in order to rebuild the target responsibility of the International Monetary Fund, it is very necessary to correctly identify market failures. Then, he applied the basic principles of corporate finance, liquidity supply and corporate risk management to the borrowing problem of a single country. Based on the basic analytical framework of "double agent" and "* * * same agent", he re-examined the policies usually suggested and considered how multilateral organizations can help debtor countries gain more benefits while opening their capital accounts. For scholars who are interested in international financial theory research, especially financial crisis research, this thin little book has brought rich benefits.
For officials in charge of government finance and related policy researchers, how to learn from the financial crisis in other countries and regions in the world and learn from the measures taken by the International Monetary Fund and other countries in the world to prevent and manage the financial crisis is a topic of interest to them. For these people, the book "Prevention and Management of Financial Crisis" by Barry Yi Chengrui, a professor of political economy at the University of California, Berkeley, can meet their requirements.
Yi, a former consultant of the International Monetary Fund, has made a lot of detailed observations and in-depth studies on the financial crisis that broke out in emerging market countries in the past decade. In this book, he deeply analyzes and studies the preventive measures against the financial crisis in various countries and the countermeasures after the financial crisis, as well as the rescue measures of the International Monetary Fund, and analyzes the policy suggestions put forward by many scholars. He discussed the prevention of financial crisis from four aspects: strengthening transparency and information disclosure, following the standards set by international organizations, strengthening prudent supervision of the financial system and managing the exchange rate, and pointed out that official efforts to prevent crisis should be based on two pillars: market discipline and prudent supervision. He specifically analyzed the lessons and effects of the measures taken by all parties in the financial crisis in Argentina and Turkey. For government officials and policy researchers, Yi's introduction and analysis are full of useful information.