World financial crisis of 2008 was evoked mainly by three self-supporting causes and consequently its effects concern three domains. At first, it revealed weakness of banking and whole financial system mainly in the USA, but also in the other countries. The traditional American mortgage banking model based on durable bilateral relationship between the bank and the debtor was replaced at the end of 1990. by a new model, based on securitization and globalization of financial markets, where the risk is unknown. In the globalization era it had to lead to financial crisis in the global scale. At second, it revealed shortsightedness of US economic policy, i.e. internal and external indebtedness (life on credit of the whole country) and the declining of political and economic hegemony on behalf of the emerging countries. At third, it revealed that the theory of economic sciences does not keep up with the reality. Mixed model of Chinese economy that uses market mechanism to the implementation of the decisions taken by meritocracy on behalf of the public welfare proved to be more effective than the traditional liberal, where market forces dominate the interests of all other subjects. In sum, the results of crisis may be creative.
The author presents initiatives launched by the European Union in order to overcome the financial crisis of the eurozone member states. To meet this goal emergency instruments were created (aid programs for Greece, European Stability Mechanism and purchase by the European Central Bank of loans issued by countries of the eurozone in debt crisis) as well as permanent instruments (the Euro Plus Pact, sharpened regulations of the Stability and Growth Pact and the Fiscal Pact). Emergency measures did not bring about any substantial positive effects since only the financial situation of Ireland improved to some extent. The state of public finances in Greece is still critical and therefore many economists suggest that this country should declare its bankruptcy. Permanent instruments to fight debt might yield the desired effects (in the case of a majority of the eurozone countries) if they are used consistently and in accordance with their object.
Bank centralny nie jest typowym podmiotem gospodarczym (nie ma charakteru komercyjnego) ani urzędem administracji państwowej, choć skupia w sobie niektóre ich cechy. Banki centralne ze względu na spełniane funkcje i realizowane zadania są uważane za instytucje sektora publicznego. Są one jednostkami państwowymi lub podporządkowanymi państwu, o różnym stopniu niezależności, np.: w USA i Niemczech bank centralny ma znaczą autonomię, zaś w Japonii, Wielkiej Brytanii i Norwegii w dużym stopniu podlega państwu. W Polsce bank centralny (NBP) odpowiada za stabilność narodowego pieniądza. Wypełniając swój konstytucyjny obowiązek, bank centralny (NBP) opracowuje i realizuje strategię polityki pieniężnej, a także i uchwalane corocznie założenia polityki pieniężnej. Poprzez zarządzanie rezerwami dewizowymi zapewnia odpowiedni poziom bezpieczeństwa finansowego państwa. W ramach pełnionych funkcji nadzorczych i regulacyjnych NBP dba o płynność, sprawność i bezpieczeństwo systemu płatniczego. Przyczynia się również do rozwoju bezpiecznej infrastruktury rynku finansowego.
EN
The central bank – isn't a typical business entity (it’s character is not commercial), neither a body of government administration, although some central bank’s attributes seems to be similar to those units. The central banks with regard for fulfilled functions and implemented tasks are considered to be public sector bodies. The central banks are the state units or units subordinated to the state, which has various degree of independence, e.g.: in the USA and Germany the central bank is characterised with large extend of autonomy but in Japan, the Great Britain and Norway the central bank is subordinated to the state in a large degree. In Poland the central bank (the National Bank of Poland) is responsible for a stability of national currency. The National Bank of Poland, fulfilling its’ constitutional duty, is preparing and implementing the strategy of monetary policy, as well as assumptions of monetary policy which are enacted every year. The central bank is ensuring appropriate level of state’s financial safety by the managing of foreign currency reserves. In the range of fulfilled supervisory and regulatory functions the National Bank of Poland is being concerned for the fluidity, the efficiency and the safety of payment system. It’s also contributing to development of safe infrastructure of financial market
Crisis in the financial markets (2008–2009), often referred to as the “financial bubble,” questioned the monetarist theory shaped in the second half of the 20th century, whose precursor was Milton Friedman. Decrease in the rate of economic growth in highly developed Western economies, which was a result of that crisis, forced leading economists to critical opinions on the commonly adopted monetarist (neoliberal) system of market economy. American economist Paul Krugman (U.S. President Barack Obama’s economic advisor) became a proponent of returning to controlled market economy and supported state intervention in the economy. The article is a contribution to the discussion about the new model of market economy which would exclude market failures.
In a period in which capital has been on the offensive for many years, using debt and financial crises as rationales for wielding austerity to hammer down wages and social services and terrorism as an excuse for attacking civil liberties, it is important to realize that the origins of this long period of crisis lay in the struggles of people to free their lives from the endless subordination to work within a society organized as a gigantic social factory. In both the self-proclaimed capitalist West and socialist East the manag-ers of that subordination, whether in private enterprise or the state, repeatedly found their plans undermined by people who refused to play by their rules and who elaborated activities and social relationships that escaped their control. The refusal of their rules meant crisis for the managers; the elaboration of other ways of being—whether charac-terized as the crafting of civil society or as autonomous self-valorization—meant crisis for and freedom from society-as-work-machine. As always, the capitalist response has involved instrumentalization and repression; basically its managers have sought to har-ness what they could and eliminate what they could not. For a long time instrumentali-zation was most obvious in the West and repression was most obvious in the East, yet both were always at play everywhere, and everywhere those responses were resisted and often escaped. It was that resistance and those escapes that led to the unleashing of the monetary weapons of financialization and their current employment to convert crisis-for-capital into crisis-for-us. It is in past and present resistance and escapes that we must discover both our weaknesses and our strengths in order to overcome capital’s current offensive and to elaborate new worlds. It is the overall thesis of this paper that Marx’s labor theory of value still provides vital aid in helping us understand these historical developments.
In the first part of the article the author analyses sources of the present financial crises. In moral aspect, the main sources of that phenomenon are rooted in greed, low level of responsibility as well as neglect of moral standards (conduct) in financial sector. Second part of the article deals with consumer and manager attitudes during the crises. It is pointed out that numerous animators of the economic life see (seek) the main remedy for the crises in saving. Polish government initiated spectacular campaign to encourage saving. Financial sector, especially banks, don’t show much interest in carrying out structural changes. This is one of the premises which grow fears on whether after the crises, real changes in attitudes will be adopted by managers, especially bank managers, all other financial sector workers, and consumers who got accustomed to living on credit. This issue constitutes the third part of the article.
Financial institutions in Poland represent both fair and unfair approach to retail market customers. There are numerous reasons for such a mixed policies, including: knowledge dominance over customers, association of profits as high business value, bank brands changeability in merger and acquisition processes, constructing similarities in financial products to fast moving consumer goods (FMCG), significant hurry in introducing changes and policies, and selling risky financial products under association of conservative banking. The article presents numerous cases caused by those reasons. The key assumption of the publication is that the mixed fairness policies towards customers are based on errors in management systems of financial institutions. Improvement of management systems could be a source for more transparent policies in this area and better market effects. The article analyses opportunities to establish standardization of management systems in the area of fairness towards customers and indicates the truck to reach the goal. Standardization and certification of management systems in this area is considered as reasonable solution for market confidence decline after the financial crisis.
The balancing of public finance and turning the tendency for public debt growth may be more difficult in Poland than in well-developed European Union member states, although the indicators of public finance sector deficit and public debt in relation to GDP are much higher there than in Poland. Measures taken in this area in Poland are less effective due to the slowdown of the Polish economy growth that – despite the improvement in 2013 – in the coming years will remain lower, in comparison to the GDP level of the period preceding the world financial crisis. It creates unfavourable macroeconomic conditions for the reconstruction of the public finance sector. The article attempts to answer the question whether – in the light of the public debt growth in Poland, whose indicator in 2013, according to Eurostat forecasts, should reach 58.2 per cent of GDP, and with difficulties in the state finance reform process – the stability of this sector is sufficiently ensured.
Purpose: Analysis of reasons, correlations and consequences following from the impact that financial investors have on commodity markets – both before and after the crisis. Methodology: The research on the tremendous impact that the financial sector exerts on price formation in commodity markets, defined as the financialization of commodity markets, was based on a narrative approach. This approach makes use of available historical documents and attempts to reconstruct factors causing structural changes in commodity markets. As a result of these factors, commodity and financial markets (and particularly capital market) have become similar to a great extent. Findings: Drawing upon the research, it can be stated that the global financial crisis has contributed not only to a major change in the involvement of investors in commodity markets, but also to a structural change of this involvement, which is accompanied by a number of negative consequences. Originality: The research enables to draw certain conclusions, e.g. that the financialization of commodity markets is reflected in a radical price fluctuation in these markets due to which the prices are isolated from fair value. Structural changes are also discussed. They entail the attempt to counteract such negative consequences, e.g. regulations imposed to provide a greater transparency of the activity undertaken by investors in commodity markets.
The economic and financial crisis of the recent years has shown that there is an urgent need for a reaction of global and national public institutions to the reasons for and effects of market links, mutual relations of the reactions of the state, central banks, business and financial entities, especially financial markets, as for arising and growing imbalances that stem not only from financial crises, but from the activities of these entities as well. For several years, a discussion has been held in various scientific and political circles on an optimal macroeconomic strategy for recovering from the economic slowdown. While in the policies of the EU bodies and the states, anti-crisis activities have been searched for, appropriate instruments selected, various initiatives taken, programmes of public authorities proposed, aimed at stimulating economic growth and, at present, inflation. It turned out that the main central banks are able to be, and have to be, the only institutions to effectively react to the debt crisis, stagnation and low economic recovery. The monetary policy of large central banks has finally replaced the fiscal policy in the financial stimulation process, and has become the hope for stimulating a stable economic growth and inflation, and for ending the financial crisis.
Purpose: The paper aims at identifying the major information gaps related to the financial sector that have emerged during the last years, including the explanation of the reasons and consequences of these gaps. Methodology: The analysis is conducted using the descriptive methodology based on real developments in the financial sector. This analysis identifies substantial institutional changes within the financial sector combined with the introduction of new financial instruments that significantly increased information gaps related to financial developments. Findings: We found that one of the main reasons for the breakdown in the financial liquidity market was the sudden buildup of a systemic risk caused, among other things, by substantial information gaps and limitations in the transparency of financial markets. The low transparency of the financial markets has been caused by institutional changes and new financial instruments introduced within the financial sector. They were introduced by the financial institutions themselves to facilitate very risky financial activities that were very profitable for them in the short term, but – as it occurred – very disruptive for the whole financial system and the whole economy in the longer term. Research limitations: The analysis is limited only to the consideration of the causes and consequences of statistical gaps substantially reducing the transparency of the financial sector. A more comprehensive project should also explore and provide an appropriate proposal for remedy data and – even more important – a proposal to set up a macroprudential policy framework. Originality: The original contribution of the paper is the link between specific institutional changes within the financial sector as well as new financial instruments and the emergence of particular information gaps.
Purpose: The purpose of this article is to confirm the thesis that the amount of public funds expenditure has no impact on the effectiveness of state functioning, which – to a greater extent – is dependent on the efficiency of these funds. In the article, the author claims that in the case of the European Union there is no explicit evidence concerning the efficiency of public funds in Member States – both on the micro and macro level. Methodology: A literature review conducted on the basis of collections of academic and scientific articles and an analysis of particular solutions implemented in the European Union and in OECD Member States as well as concerning the consolidation of public funds in the context of the effectiveness of state functioning. Originality: The author of this work – on the basis of the (performed) analysis presented in the article, explains that the optimal fiscal policy should use appropriately selected tools allowing to achieve the best (optimal) method for the management of public funds, in particular the external and internal position of the economy of the given country. The key factors that decide on the effectiveness (excluding non-financial factors) are neither universal (absolute) nor relative extent of public spending. The author concludes that the level of effectiveness is either dependent on the structure of this spending and procedures connected with public expenditure planning, executing, accounting and reporting processes, or the level (quality) of the effectiveness and efficiency evaluation system.
The accession of the group of eight post-communist Central and Eastern European mem- ber states who joined in 2004 marked a historic watershed in the development of the European Union. The subsequent enlargements in 2004 represented the biggest expansion of the EU’s membership base since the beginning of the institutionalised process of insti- tutional European integration after the end of WW2. Even more importantly however, it constituted the official end of more than four decades in which the European continent had been artificially divided into two ideological and military blocs by the Cold War. This article concentrates on the 2004 enlargement and analyses how the CEE-8 group has integrated into the EU’s institutional and policy acquis over the past decade. In this respect the impact of the global financial crisis of 2008–09 represents a major challenge for the countries of the region in their ongoing political, economic and social transforma- tion since the fall of communism. The paper examines to what extent the CEE countries have managed to tackle the multiple challenges of the post-communist transition and which factors have determined their status as predominantly passive policy-takers. Special emphasis is put on the impact of the 2008–09 global financial crisis, which poses the risk of backsliding the CEE’s domestic political and economic transition process and growing alienation from the increasingly complex new coordinative EU policy mechanisms. The article also considers the potential future role of the semi-institutionalised cooperation amongst the Visegrád 4 group (Czech Republic, Hungary, Poland and Slovakia) in effec- tively promoting the interests of the wider CEE region in the EU. The main challenge in this respect lies in the persistent diversity of national interests and varying levels of com- mitment towards transnational cooperation amongst the V4 and the wider CEE group. This especially applies to the regional leader Poland, which has been torn between the ambition to intensify regional cooperation and the desire to become a leading player in the EU alongside France and Germany.
Purpose: The aim of this paper is to show the conditions of the EU against the realities of the global economy in the post-crisis era, an indication of which are the determinants of the development of the competitive advantage of the Community. Methodology: An analysis of the determinants of growth at different stages of the process of EU integration with particular emphasis on optimum currency area criteria for the euro zone crisis, under asymmetric demand shock. Findings: The last global crisis has highlighted the structural weaknesses of the EU, which in times of economic prosperity can be compensated by a system of transfers and the mechanism of credibility borrowing. With such a strong crisis Europe needs more growth. Research limitations: The costs of this crisis affect the Community, significant for both public finances and the standard of life, but are also visible on a global scale, which is difficult to estimate. Originality: An ex ante perspective on the determinants that will not only restore EU’s position in the world, but also did not miss an opportunity to play a significant role in the rapidly changing global economy, the twenty first century.
Koniec ubiegłego dziesięciolecia przyniósł kryzys finansowy, który wymusił na rządach państw wysoko rozwiniętych oraz bankach centralnych działania interwencyjne o niespotykanym wymiarze i charakterze. W artykule porównano instrumenty interwencji Systemu Rezerwy Federalnej (SRF) i Europejskiego Banku Centralnego (EBC) w okresie kryzysu 2007-2009. Składa się on z trzech części merytorycznych. W pierwszej przedstawiono krótki opis przyczyn i przebiegu kryzysu. Druga prezentuje instrumenty interwencji EBC-u. Trzecia przedstawia regulacje na rynku pieniądza prowadzone przez SRF w okresie 2007-2009.
EN
Financial crisis of 2007-2009 affected mainly the highly developed countries and embraced all groups of markets and their participants. Governments and central banks had to face new challenges. The author of the article compares instruments of intervention used by Federal Reserve System and European Central Bank in the time of crisis of 2007-2009. The article consists of three merit parts. In the first one, the author describes briefly causes and the course of the crisis. The second part describes the instruments of intervention used by ECB. The third one presents regulations on the money market implemented by FRS.
Purpose: The goal of the text is to show a number of challenges which major central banks must face today. Impressive engagement of the central banks in counter-crisis policy leads to many controversial decisions and its results are not clear both for economic theory and for real economy. For now, one cannot show a full overview of the policy of central banks – on the one hand, thanks to the expansionary monetary policy, recession was quite shallow and the risk in financial markets has declined, but on the other hand, few side effects of this policy can be mentioned, which can jeopardize economic stability in the future. Methodology: The paper has a theoretical character. The findings are based on a literature review and an analysis of the major macroeconomic data. Findings: The text indicates the most important areas which have to be investigated by central banks. There are serious doubts about issues like: inflation targeting as a fundamental part of monetary policy, the efficiency of monetary policy instruments and the side effects of loose monetary policy. Originality: The text presents quite a new approach in analyzing macroeconomic policy by indicating important gaps in contemporary economic knowledge according to which economic policy is conducted.
The financial crisis of 2008–2009 presents us with the opportunity to not only understand what has happened in the markets but also to reflect on the purpose of the marketplace. Drawing from expert economic analyses, we first assess the central lesson of the crisis—the failure of self-regulation by rational self-interest to moderate externalized risk in financial markets. Second, we ask the philosophical question occasioned by the crisis concerning the moral meaning of economic activity: Is market exchange solely for the sake of self-interest? Reflecting on the poetry of Kahlil Gibran and engaging with the recent encyclical of Pope Benedict XVI, we turn our attention from political economy to moral economy: the relationships among market exchange, self-interest, and the common good—and, in particular, the prior conditions of market exchange and their moral significance for the present crisis.
The last global financial crisis exposed a number of structural weaknesses of the eurozone which generated a great deal of additional costs as well as risks leading almost to its collapse. The creation of the Banking Union is hoped to strengthen the eurozone, however, it may not be enough, even when complemented with other reforms, to fully restore its effectiveness. Implementation of a common budget is necessary to enhance further integration of the euro area and to assure its financial stability. However, it seems that application of much less demanding tools of fiscal integration should be sufficient. A relatively small "insurance budget" would provide the definitive guarantee of bank deposits what would significantly reduce the risks for Poland when it joins the eurozone.
In this article, stability of fiscal policy and its impact on fiscal market have been analyzed. The issue appears especially important in times of the financial crisis which has affected all the European Union countries, although to a different extent. To achieve this, the author presented the aims, the tools and the aspects of financial stability to confront them with the situation that has occurred in the EU countries. To present the issue profoundly, the scientific research related to fiscal policy and its impact on financial markets were used in two opening units. In the third unit, the statistic data was cited to show the condition of the EU countries, the changes to it and the attempts aimed at improving the state of the public finance and therefore stabilizing financial markets.
This paper presents views and believes of the authors on the relevance of the current economic theory for the understanding of the complex world we live in. Has the crisis indeed demonstrated that as profession we are misled by the beauty of the mathematical models and the only useful, workable solutions at hand were provided in early 1930s? The purpose of this paper is to provide a review of the current state-of-the-art literature from the perspective of its usefulness in the context of economic crises. We argue that although we might be unable to answer many questions or to “predict” crises, the path we are following is the right one. Furthermore, going back to Keynes would not solve any of the identified problems and would generate problems on its own. Analysing the state of economics after the crisis it is argued that (i) we need models with micro-foundations, (ii) we need better models with micro-foundations. Already existent and promising directions for future research are discussed.
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