Global financial system

With a world full of greed and fear, a robust financial system is the order of the day, one that punishes excess greed and allays fear. The current global financial system is a delicate cobweb where one portion shakes the entire system. In such a scenario, it is impossible to count the types of risks associated, leave alone mitigating the risks. Of all the risks, potentially the biggest risk is called “risk risk”, which is the risk of not knowing the associated risks.


The risks are borne by all stakeholders in the economy. The recent recession demonstrates that with the growth of communication, recession has a faster and wider impact. Most traumatized are the poorest stakeholders, the laid off workers & owners of small & medium enterprises. It does not affect the creators of problems as they always seem to have a golden parachute. This needs to be controlled. The accountability has to be brought in the system.

With immense strides in the technology sector, the enhancement in financial engineering does not reflect the sign of times. It looks antiquated and leaves stakeholders exposed. Efforts should not just be made to devise newer financial instruments of greed. New ideas in making the economy sturdy and the people safer are far more relevant. We should fight economic disasters like any other negative. They should not be considered imminent all the time.


In Mid 2008, the price of Crude oil climbed over $150 a barrel. It was claimed that speculators were pushing the prices beyond the fundamentals. All over the globe, people were adjusting to the high price of gas by driving less and shutting automobile industries. For sure the inventors of “futures” never wanted to kill the auto industry or its workers. The instruments are as good as their use. If misused the financial instruments have the power to redefine the economy. The invisible hand of market plays its role at the cost of jobs and industries.


So, should we stop innovating, or is it possible for people to restrain from chasing money in a capitalistic society? All the above questions have a negative answer. The solution lays in the fact that financial stability and protection should be glamorized like Investment Banks & Consulting. The need for incentivizing the protector’s job (through salaries/perks) is very important. If the top financial genius is utilized for this purpose then probably we can achieve success.

If I end this page here, then it will appear unrealistic that a highly paid talent pool can resolve all issues. The amazing number of financial disasters, and deception done by the protectors like former NASDAQ’s chairman Bernie Madoff, all point to the fact that greed is insurmountable. The economy is like a strange casino. Where if a few players are winning, all players herd after and start to increase their bets. But as soon as one player sneezes, all get afraid of an omen and start to withdraw. In a real casino people don’t act in herds or else a casino would not work. But in the world economy, the cyclical patterns are present. It is a casino, where everything is interdependent, players play with “other people’s money” in their pocket. Herd behavior is the norm, Creativity is killed. Whistleblowers are driven to extinction. The guys who could save us are not listened to.
Let's try and look at fundamentals, avoid being fooled by randomness, essentially “call a spade a spade and not hearts just because the market feels so”.