Open AccessInternational financial markets and development
Author(s) -
Peter Wahl
Publication year - 2009
Publication title -
hts teologiese studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.282
H-Index - 15
eISSN - 2072-8050
pISSN - 0259-9422
DOI - 10.4102/hts.v65i1.284
Subject(s) - hedge fund , finance , dominance (genetics) , financial market , real economy , economics , financial crisis , equity (law) , financial system , welfare , financial instrument , business , private equity , market economy , monetary economics , macroeconomics , biochemistry , chemistry , political science , law , gene
The current financial crisis has not come about by chance. It is the result of a system that has emerged over the last 30 years and which Keynes may well have called the ‘casino economy’. The dominance of finance over real economy characterises the financial crisis, while finance itself is dominated by the all-encompassing target of maximum profit at all times. Other aims of economic activity such as job creation, social welfare and development have fallen by the wayside. In response, new actors are surfacing, e.g. the institutional investor (hedge funds, private equity funds, etc.), while new instruments are leading to highly leveraged and destabilising derivatives. The casino system has been promoted by governments and intergovernmental institutions to liberalise and deregulate financial markets. Although developing countries have not participated in the casino system, they have been suffering most from the spill-over into the real economy. The main lesson learnt is that the casino has to be closed