Anatomy and lessons of the global financial crisis. Is US consumption financed by Chinese savings?

Savings and investments in the American money market by emerging countries, primarily China, financed the excessive consumption of the United States in the early 2000s, which indirectly led to a global financial crisis. The crisis started from the real estate mortgage market. Such balance disrupting processes began on the American financial market which contradicted all previously known equilibrium theories of every school of economics. Economics has yet to come up with models or empirical theories for this new disequilibrium. This is why the outbreak of the crisis could not be prevented or at least predicted. The question is, to what extent can existing market theories, calculation methods and the latest financial products be held responsible for the new situation. This paper studies the influence of the efficient market and modern portfolio theory, as well as Li’s copula function on the American investment market. Naturally, the issues of moral risks and greed, credit ratings and shareholder control, limited liability and market regulations are aspects, which cannot be ignored. In summary, the author outlines the potential alternative measures that could be applied to prevent a new crisis, defines the new directions of economic research and draws the conclusion for the Hungarian economic policy.

Preface

This is the preface to the first comprehensive analysis of the regulation of money market funds in the EU and US at both the theoretical and practical levels. Its unique mutli-disciplinary approach provides a rigorous framework for comparative analysis and expert opinions on complex regulations that will help practitioners with decisions on portfolio management and in solving regulatory compliance issues. The theoretical framework has unique cases and examples and includes checklists to assist with the practice of fund management and legal risk analysis.

Introduction

This is the introductory chapter to the first comprehensive analysis of the regulation of money market funds in the EU and US at both the theoretical and practical levels. Its unique mutli-disciplinary approach provides a rigorous framework for comparative analysis and expert opinions on complex regulations that will help practitioners with decisions on portfolio management and in solving regulatory compliance issues. The theoretical framework has unique cases and examples and includes checklists to assist with the practice of fund management and legal risk analysis.

La política económica de la República Popular China: un desafío a la hegemonía monetaria de los Estados Unidos en el Sudeste Asiático. Periodo 2003 -2015

La presente investigación parte del declive de la hegemonía de los Estados Unidos y el paralelo asenso económico de la República Popular China en las últimas décadas. De este modo, se plantea como objetivo principal analizar cómo China mediante su política económica desafía a la hegemonía monetaria de los Estado Unidos en el Sudeste Asiático, durante el periodo de 2003 a 2015. Con el fin de lograr este objetivo, se elabora un estudio de la hegemonía de los Estados Unidos y sus dinámicas en el Sudeste Asiático. Asimismo, se analiza la política económica de la República Popular China y su incidencia frente a la hegemonía estadounidense en el Sudeste Asiático.

Making money in the stock market,

Mode of access: Internet.

Value for money : procuring infrastructure

Australia is just one of many developed countries facing the challenge of delivering value for money in the provision of a substantial infrastructure pipeline amidst severe construction and private finance constraints. To help address this challenge, this chapter focuses on developing an understanding of the determinants of value at key procurement decision points that range from the make-or-buy decision, to buying in the context of market structures, including the exchange relationship and contractual arrangement decision. This understanding is based on theoretical pluralism and illustrated by research in the field of construction and maintenance, and in public-private partnerships.

Delivering value for money in the procurement of public sector major infrastructure : a new first-order decision making model

The significant challenge faced by government in demonstrating value for money in the delivery of major infrastructure resolves around estimating costs and benefits of alternative modes of procurement. Faced with this challenge, one approach is to focus on a dominant performance outcome visible on the opening day of the asset, as the means to select the procurement approach. In this case, value for money becomes a largely nominal concept and determined by selected procurement mode delivering, or not delivering, the selected performance outcome, and notwithstanding possible under delivery on other desirable performance outcomes, as well as possibly incurring excessive transaction costs. This paper proposes a mind-set change in this particular practice, to an approach in which the analysis commences with the conditions pertaining to the project and proceeds to deploy transaction cost and production cost theory to indicate a procurement approach that can claim superior value for money relative to other competing procurement modes. This approach to delivering value for money in relative terms is developed in a first-order procurement decision making model outlined in this paper. The model developed could be complementary to the Public Sector Comparator (PSC) in terms of cross validation and the model more readily lends itself to public dissemination. As a possible alternative to the PSC, the model could save time and money in preparation of project details to lesser extent than that required in the reference project and may send a stronger signal to the market that may encourage more innovation and competition.

The regulation of insurance intermediaries in the Australian financial services market

The insurance industry discharges a critical role in the Australian economy and is a significant part of the Australian financial services market. The industry relies upon intermediaries, the principal types being brokers and agents, to promote, arrange and distribute their products and services in the market. The pivotal role that they play in this context and sensitivities associated with the consumer oriented products, such as house and contents insurance, has ensured close regulatory attention. Of particular importance was the passage of the Insurance (Agents and Brokers) Act 1984 (Cth), a comprehensive attempt to address the responsibilities of intermediaries as well as particular problem areas associated with the handling of money. However, with the introduction of financial services and market reform early in the new millennium this insurance intermediary specific regulatory approach was abandoned in favour of a market-wide strategy; that is, market reform was based upon across-the-board licensing, disclosure, conduct and fairness standards, and all financial products and services are now regulated at a generic level under Ch 7 of the Corporations Act 2001 (Cth). This article briefly explores the categories of insurance intermediaries and the relevant distinctions between them but focuses mainly upon the regulatory context in which they operate. This context transcends a strictly legal framework as the regulatory body, the Australian Securities and Investments Commission (ASIC), has sought to inform and guide the market through Policy Statements and Regulatory Guides. The usefulness of these guides as an adjunct to the legislation in explaining the scope and operation of regulatory framework is examined. In addition, the article looks at the self-regulatory and dispute resolution practices in this area and their impact. In conclusion an assessment of this across-the-board regulatory regime is advanced.

Financial Markets, Institutions and Money [3rd ed.]

"The financial system is a key influencer of the health and efficiency of an economy. The role of the financial system is to gather money from people and businesses that currently have more money than they need and transfer it to those that can use it for either business or consumer expenditures. This flow of funds through financial markets and institutions in the Australian economy is huge (in the billions of dollars), affecting business profits, the rate of inflation, interest rates and the production of goods and services. In general, the larger the flow of funds and the more efficient the financial system, the greater the economic output and welfare in the economy. It is not possible to have a modern, complex economy such as that in Australia, without an efficient and sound financial system. The global financial crisis (GFC) of late 2007–09 (and the ensuing European debt crisis), where the global financial market was on the brink of collapse with only significant government intervention stopping a catastrophic global failure of the market, illustrated the importance of the financial system. Financial Markets, Institutions and Money 3rd edition introduces students to the financial system, its operations, and participants. The text offers a fresh, succinct analysis of the financial markets and discusses how the many participants in the financial system interrelate. This includes coverage of regulators, regulations and the role of the Reserve Bank of Australia, that ensure the system’s smooth running, which is essential to a modern economy. The text has been significantly revised to take into account changes in the financial world."---publisher website Table of Contents 1. The financial system - an overview 2. The Monetary Authorities 3. The Reserve Bank of Australia and interest rates 4. The level of interest rates 5. Mathematics of finance 6. Bond Prices and interest rate risk 7. The Structure of Interest Rates 8. Money Markets 9. Bond Markets 10. Equity Markets

Boken, berättelsen, pengarna I den digitala tidsåldern [The book, the story and the money in the digital age]

År 2012 är distribution av litteratur via internet inte längre en framtidsvision, utan ett etablerat format vid sidan av traditionella format som exempelvis pocketboken, den inbundna boken och ljudboken (AAP 2011; Amazon 2011; PaidContent 2011). Men den digitala tekniken etablerar inte enbart ett nytt format, utan förändrar också grundförutsättningarna för litterära konstformer och marknader. Detta kapitel behandlar en betydelsefull aspekt av denna förändring, nämligen hur den digitala tekniken påverkar relationen mellan läsare och författare och ökar läsarens inflytande över den kreativa processen. I den digitala tidsåldern är det möjligt att skapa berättelser online i en interaktiv process som involverar både läsare och författare. Kapitlet presenterar modeller för hur sådan “samproducerad e-litteratur” förändrar marknaden för litteratur och hur den påverkar den traditionella litteraturen.

The performance of diversified emerging market equity funds

We investigate the performance of globally diversified emerging market equity funds during the first decade of the twenty-first century. A vast majority of these funds do not outperform the market benchmark even before transaction costs. The systematic risk of most of the funds is similar to that of the market benchmark portfolio, which may suggest that they aim to offer diversification benefits rather than seeking superior risk-adjusted returns through active management. We do not find any evidence of market timing ability amongst these funds. Finally, whilst we detect persistence in performance, this result is driven mainly by the poorly performing funds.

'Mining money': science, legal technologies & working the borderlands of global finance

This paper explores the roles of science and market devices in the commodification of ‘nature’ and the configuration of flows of speculative capital. It focuses on mineral prospecting and the market for shares in ‘junior’ mining companies. In recent years these companies have expanded the reach of their exploration activities overseas, taking advantage of innovations in exploration methodologies and the liberalisation of fiscal and property regimes in ‘emerging’ mineral rich developing countries. Recent literature has explored how the reconfiguration of notions of ‘risk’ has structured the uneven distribution of rents. It is increasingly evident that neoliberal framing of environmental, political, social and economic risks has set in motion overflows that multinational mining capital had not bargained for (e.g. nationalisation, violence and political resistance). However, the role of ‘geological risk’ in animating flows of mining finance is often assumed as a ‘technical’ given. Yet geological knowledge claims, translated locally, designed to travel globally, assemble heterogeneous elements within distanciated regimes of metrology, valuation and commodity production. This paper explores how knowledge of nature is enrolled within systems of property relations, focusing on the genealogy of the knowledge practices that animate contemporary circuits of speculative mining finance. It argues that the financing of mineral prospecting mobilises pragmatic and situated forms of knowledge rather than actuarially driven calculations that promise predictability. A Canadian public enquiry struck in the wake of scandal associated with Bre-X’s prospecting activities in Indonesia is used to glean insights into the ways in which the construction of a system of public warrant to underpin financial speculation is predicated upon particular subjectivities and the outworking of everyday practices and struggles over ‘value’. Reflection on practical investments in processes of standardisation, rituals of verification and systems of accreditation reveal much about how the materiality of things shape the ways in which regional and global financial circuits are integrated, selectively transforming existing social relations and forms of knowledge production.

Match-fixing and Money-laundering

his essay is premised on the following: a conspiracy to fix or otherwise manipulate the outcome of a sporting event for profitable purpose. That conspiracy is in turn predicated on the conspirators’ capacity to: (a) ensure that the fix takes place as pre-determined; (b) manipulate the betting markets that surround the sporting event in question; and (c) collect their winnings undetected by either the betting industry’s security systems or the attention of any national regulatory body or law enforcement agency.

Unlike many essays on this topic, this contribution does not focus on the “fix”– part (a) of the above equation. It does not seek to explain how or why a participant or sports official might facilitate a betting scam through either on-field behaviour that manipulates the outcome of a game or by presenting others with privileged inside information in advance of a game. Neither does this contribution seek to give any real insight into the second part of the above equation: how such conspirators manipulate a sports betting market by playing or laying the handicap or in-play or other offered betting odds. In fact, this contribution is not really about the mechanics of sports betting or match fixing at all; rather it is about the sometimes under explained reason why match fixing has reportedly become increasingly attractive as of late to international crime syndicates. That reason relates to the fact that given the traditional liquidity of gambling markets, sports betting can, and has long been, an attractively accessible conduit for criminal syndicates to launder the proceeds of crime. Accordingly, the term “winnings”, noted in part (c) of the above equation, takes on an altogether more nefarious meaning.

This essay’s attempt to review the possible links between match fixing in sport, gambling-related “winnings” and money laundering is presented in four parts.

First, some context will be given to what is meant by money laundering, how it is currently policed internationally and, most importantly, how the growth of online gambling presents a unique set of vulnerabilities and opportunities to launder the proceeds of crime. The globalisation of organised crime, sports betting and transnational financial services now means that money laundering opportunities have moved well beyond a flutter on the horses at your local racetrack or at the roulette table of your nearest casino. The growth of online gambling platforms means that at a click it is possible for the proceeds of crime in one jurisdiction to be placed on a betting market in another jurisdiction with the winnings drawn down and laundered in a third jurisdiction and thus the internationalisation of gambling-related money laundering threatens the integrity of sport globally.

Second, and referring back to the infamous hearings of the US Senate Special Committee to Investigate Organised Crime in Interstate Commerce of the early 1950s, (“the Kefauver Committee”), this article will begin by illustrating the long standing interest of organised crime gangs – in this instance, various Mafia families in the United States – in money laundering via sports gambling-related means.

Third, and using the seminal 2009 report “Money Laundering through the Football Sector” by the Financial Action Task Force (FATF, an inter-governmental body established in 1989 to promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system), this essay seeks to assess the vulnerabilities of international sport to match fixing, as motivated in part by the associated secondary criminality of tax evasion and transnational economic crime.

The fourth and concluding parts of the essay spin from problems to possible solutions. The underlying premise here is that heretofore there has been an insularity to the way that sports organisations have both conceptualised and sought to address the match fixing threat e.g., if we (in sport) initiate player education programmes; establish integrity units; enforce codes of conduct and sanctions strictly; then our integrity or brand should be protected. This essay argues that, although these initiatives are important, the source and process of match fixing is beyond sport’s current capacity, as are the possible solutions.

Mining Money: the generative capacities of scientific and legal knowledge practices in the making of resource economies

In 1997 a scandal associated with Bre-X, a junior mining firm, and its prospecting activities in Indonesia, exposed to public scrutiny the ways in which mineral exploration firms acquire, assess and report on scientific claims about the natural environment. At stake here was not just how investors understood the provisional nature of scientific knowledge, but also evidence of fraud. Contemporaneous mining scandals not only included the salting of cores, but also unreliable proprietary sample preparation and assay methods, mis-representations of visual field estimates as drilling results and ‘overly optimistic’ geological reports. This paper reports on initiatives taken in the wake of these scandals and prompted by the Mining Standards Task Force (TSE/OSC 1999). For regulators, mandated to increase investor confidence in Canada’s leading role within the global mining industry, efforts focused first and foremost upon identifying and removing sources of error and wilfulness within the production and circulation of scientific knowledge claims. A common goal cross-cutting these initiatives was ‘a faithful representation of nature’ (Daston and Galison 2010), however, as the paper argues, this was manifest in an assemblage of practices governed by distinct and rival regulative visions of science and the making of markets in claims about ‘nature’. These ‘practices of fidelity’, it is argued, can be consequential in shaping the spatial and temporal dynamics of the marketization of nature.