Vietnam national university of economics and business
Concept of financial crisis
tải về 195.42 Kb.
|
Khung-CTDT-TCNH-CLC, Ruot thang 4 (2)-99-102
- Điều hướng trang này:
- 1.2. Types of financial crisis
1.1. Concept of financial crisisGlobalization, besides bringing great opportunities for each country and each person, also has many potential risks, including the risk of a global crisis. The change of financial markets with the degree of trade and financial openness of countries, each domestic condition of each country, leads to the possibility of crisis. An economic crisis (Encyclopedia) is a decline in economic activity that is prolonged and more severe than a recession in the business cycle. The economic crisis that culminates is the cause of the financial crisis because the economic crisis is depressed, the overproduction crisis will increase the demand to use money for the purpose of consuming goods. Financial crisis occurs when the demand for money exceeds the supply of society, the demand for money of the people or of domestic and foreign investors has put pressure on the banking system and financial institutions causing banks and financial institutions to collapse. The financial crisis is only a part of the economic crisis, but the financial crisis causes the most damage because countries have free trade, capital is moved through different countries, so the financial crisis is contagion factor and economic crisis it does not have a direct contagion factor. A financial crisis, to put it simply, is the insolvency of financial corporations, which leads to collapse and chain bankruptcy in the financial system. Signs of a financial crisis are: Banks fail to return depositors' deposits Borrowers, including A-rated customers, are not able to repay the bank's loans in full Government abandons fixed exchange rate regime 1.2. Types of financial crisisa. Banking crisis This is the situation that occurs when customers simultaneously withdraw money from the bank. Because banks lend most of the deposits, when customers withdraw money at the same time, it will be difficult for banks to be able to repay the debts. Mass withdrawals could lead to bank failure, causing many customers to lose their deposits, unless they are compensated by deposit insurance. If massive withdrawals spread, it will cause a systemic banking crisis. It is also possible that the above phenomenon is not widespread, but credit interest rates are increased (to mobilize capital) due to concerns about shortfalls in the budget. At this point, it is the banks that will become the factor causing the financial crisis. b. Crisis in financial markets Crisis in the financial market often occurs due to two main reasons: due to State policies and due to the existence of speculative "bubbles". The first factor to talk about is the state's policies. When the state issues money to cover budget deficits, this affects the fixed exchange rate. People will lose faith in the local currency and switch to hoarding in foreign currencies. At that time, the State's foreign currency reserves will be depleted. The state is forced to give up the fixed rate and the rate will rise. In addition, there are always speculative "bubbles" in the market, which contain the risk of collapse. When most market participants rush to buy some commodity in the financial market (such as stocks, real estate), but not for the purpose of long-term investment, but to buy for speculative purposes, in the hope of selling at a higher price and making a profit, which pushes up the value of these commodities, exceeding their true value. This situation will lead to the risk of collapse in the financial markets, because such short-term investors always buy and sell according to the general trend in the market: they buy when they see many people buying together, creating virtual fevers in the market and selling when there are many people selling, causing a drop in price, they don't need to know the reason when to buy and when to sell, so it is called "herd mentality". c. World financial crisis When a country with a strong currency suddenly devalues its currency or when a country loses its ability to repay its national debts, a currency crisis occurs. d. Financial crisis in economic groups Corporations often get into financial crisis due to two main reasons: due to improper investment plans, failure to recover investment capital, leading to non-payment of loans for investment, leading to bankrupt; due to the chain effect from the general crisis, when businesses could not borrow capital for investment or investment projects could not recover capital due to the crisis. tải về 195.42 Kb. Chia sẻ với bạn bè của bạn:
|