A Quote by Dan Gilbert
The efficiency, credibility, and liquidity of the financial markets have been foundational to the largest economy in the world.
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Well, the U.S., of course, is the world's largest economy. It's about a quarter of the world's output. It's also home to many of the largest financial institutions and financial markets.
Hedge funds, private equity and venture capital funds have played an important role in providing liquidity to our financial system and improving the efficiency of capital markets. But as their role has grown, so have the risks they pose.
Among other objectives, liquidity guidelines must take into account the risks that inadequate liquidity planning by major financial firms pose for the broader financial system, and they must ensure that these firms do not become excessively reliant on liquidity support from the central bank.
In a financial crisis, only the Fed, as the lender of last resort, might stand between our economy and financial catastrophe. We must leave the Fed with the flexibility to provide liquidity in order to stop a financial panic.
The impact on the broader economy and financial markets of the problems in the subprime markets seems likely to be contained.
In Germany it is good if as many people as possible join initiatives and peaceful demonstrations against the rule of the financial markets. Worshipping the unfettered freedom of global markets has brought the world to the brink of ruin. We now need social and ecological rules for the market economy.
There's been a dichotomy in the world financial markets over the last 30 years between the developed markets and the developing markets. Brazil, for example, always had to pay a lot more in interest to borrow money than governments in developed nations.
Even in financial markets, the concept of market efficiency does not hold.
Since the dawn of civilization, markets have been ubiquitous. Many of us have benefited from their focus and efficiency. Yet two widely held beliefs - that markets are best left unregulated and that markets are inherently benign - are naive and outdated.
I was convinced that the trading frequency measured a fundamental heartbeat of financial markets. Clearly it reflected the flow of information. It turns out also to be closely related to measures of liquidity.
The financial markets tend to be just a backdrop for a novel, for a heist or something that isn't necessarily integral to it. On the whole, I don't think the financial world has been well served by novels.
If stability and efficiency required that there existed markets that extended infinitely far into the future - and these markets clearly did not exist - what assurance do we have of the stability and efficiency of the capitalist system?
Helping Wall Street regain confidence and stability was the last thing an angry public wanted in 2009 after the markets crashed. But without such support, markets can buckle and liquidity can disappear - often for decades, as has been the case in Japan.
The savings rate in Italy is high, but the markets do not trust Italy even though it's the third largest economy in the European Union and the eighth in the world.
Apparently modern financial regulators are vastly more sophisticated than we were as financial regulators 25 years ago - because we had never figured out that the key to financial stability was leaving felons in charge of the largest financial institutions in the world.
It used to be said that when the U.S. sneezed, the world caught a cold. The opposite is equally true today. Our prosperity is linked inextricably to the maintenance of a strong world economy, an open international trading system, and stable global financial markets.
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