March 22, 2010

“World after credit crisis”

“ In the last one year of Financial activities happening, the world has changed a lot. As consultants we share with you insights and viewpoint on how and where lies the scope of financial prosperity for all who are involved in the financial resurrection of India and World. We wish happy reading and blogging to all our readers. Views most welcome, Just a blog away. 
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Today's Post-

“World after credit crisis”

Financial shockwaves are still reverberating, but with the recovery in the global economy and financial markets increas­ingly apparent, we feel it is important to redraw the map of what the world post the credit crisis might look like and the strategic challenges facing investors.

New World, Old Rules?

The credit crisis has broken many assumptions of how the world operates; we analyze what might replace these old certainties.
Towards a more balanced global economy

Toward a more balanced global economy
Consumption-led imbalances contributed to the credit crisis – these are now being unwound, though further painful adjustment is required. Emerging economies are now bigger and more stable, and should help bolster global growth.

Will central banks now target bubbles?

Before the credit crisis, central banking orthodoxy was that asset bubbles were hard to identify, harder still to prevent and nearly impossible to deflate in an orderly way. This needs to change if we are to avoid further damaging asset price bubbles.


Has capitalism failed?

The role of the State will change in the post-credit crisis world. The role played by governments in their approach to new regulation and any protectionist tendencies they display will prove key in shaping the new environment.

The rise of Chinese consumption

With the American consumer weakened financially by the credit crisis, Dong Tao, Chief Economist, Non-Japan Asia at Credit Suisse, illustrates how consumption in China will still be on a secular rise, providing a lift to the rest of the world and partially offsetting the relative decline from the USA over the next decade. We expect China’s private consumption to account for 21% of global consumption by 2020

Re-assessing the anchor role of the US dollar

US dollar’s global role is set to face deep scrutiny in the coming years. Implications for the greenback are negative, while prospects for liquid alternatives to the dollar, such as the Euro, are positive.
Emerging bank business models

New regulation of the banking sector may encourage some large banks to become more focused, emphasizing certain businesses and exiting others.
And it may cause a permanent reduction in some banking activities, including structured finance. Overall, new business models are expected to emerge in both developed countries and in emerging countries.

Green shoots
Despite the credit crisis, other important debates continue. One is the revolution in green technologies and the importance of global warming.

The future of asset management industry
Focus in particular industry consolidation, risk management, hedge funds and the growth of the industry in emerging markets.
  • ·         Demonstrate good risk management, especially in extreme/stressed cir­cumstances.
  • ·         Demonstrate very strong industry eth­ics and active, robust corporate gov­ernance.
  • ·         Transparency in investment processes and systems – no black boxes.
  • ·         Display a high quality of reporting.
  • ·         High-quality research

From crisis to consolidation
The credit crisis has been an exercise of “the survival of the fittest” across the corporate sector. We expect the long-term winners to prove to be those who have turned out to be the “last men standing” among industries that now restructure and consolidate.

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