Brands are obsessed with appearing cool; therefore, they capture and mine youth


The derivative market has driven finance



Download 258,6 Kb.
Pdf ko'rish
bet11/78
Sana08.04.2023
Hajmi258,6 Kb.
#925860
1   ...   7   8   9   10   11   12   13   14   ...   78
Bog'liq
Merged document (3)

The derivative market has driven finance 
further away from benefiting the real 
economy.
In its early days, finance centered around 
helping people get the money they needed to 
realize their ideas. Think of a bank providing a 
baker with enough capital to open up his own 
bakery.
But due to rampant financialization, those good 
old days are gone, and we’re drowning in 
needless transactions that aren’t doing us any 
good.
The rampant trading activity and massive growth 
in the finance sector is called financialization. 
The problem is, financialization helps banks and 
stock markets, but hasn’t had any positive 
impact on household income, small business 
growth or the economy at large.
Financialization started in the 1970s, when large 
institutions started trading more and more 


securities, which are financial assets such as 
stocks, bonds and mutual funds. But what really 
pushed financialization over the edge was the 
emergence of a new market based on derivative 
securities.
Derivatives are like contracts that base their 
value on how well other assets perform. Based 
on the contract created, one party can end up 
benefiting from an asset’s price going up or 
down, depending on the kind of derivative it is.
One kind of derivative is known as a credit 
default swap (CDS), which allows a bank to 
protect itself against a borrower defaulting, or 
failing to make payments, on their loan or 
mortgage.
In a way, it functions like insurance: the 
institution investing in the CDS is promising to 
pay the bank in the event of a default, while the 
bank is promising to eventually reimburse them, 
with interest.
This is how we ended up in the recent financial 
crisis of 2008: too many banks were giving out 
loans to people who were in no position to honor 
them. Then, too many people defaulted on their 
loans, and suddenly all the institutions needed 
money from each other. The system collapsed 
upon itself.
This crisis was further impacted by technology 
that made it easier than ever for people to trade 
securities and derivatives, leading to massive 
artificial inflation of the financial sector.
These practices are tantamount to gambling with 
other people’s money, which, as the recent crisis 
has shown, isn’t helping anyone.

Download 258,6 Kb.

Do'stlaringiz bilan baham:
1   ...   7   8   9   10   11   12   13   14   ...   78




Ma'lumotlar bazasi mualliflik huquqi bilan himoyalangan ©hozir.org 2024
ma'muriyatiga murojaat qiling

kiriting | ro'yxatdan o'tish
    Bosh sahifa
юртда тантана
Боғда битган
Бугун юртда
Эшитганлар жилманглар
Эшитмадим деманглар
битган бодомлар
Yangiariq tumani
qitish marakazi
Raqamli texnologiyalar
ilishida muhokamadan
tasdiqqa tavsiya
tavsiya etilgan
iqtisodiyot kafedrasi
steiermarkischen landesregierung
asarlaringizni yuboring
o'zingizning asarlaringizni
Iltimos faqat
faqat o'zingizning
steierm rkischen
landesregierung fachabteilung
rkischen landesregierung
hamshira loyihasi
loyihasi mavsum
faolyatining oqibatlari
asosiy adabiyotlar
fakulteti ahborot
ahborot havfsizligi
havfsizligi kafedrasi
fanidan bo’yicha
fakulteti iqtisodiyot
boshqaruv fakulteti
chiqarishda boshqaruv
ishlab chiqarishda
iqtisodiyot fakultet
multiservis tarmoqlari
fanidan asosiy
Uzbek fanidan
mavzulari potok
asosidagi multiservis
'aliyyil a'ziym
billahil 'aliyyil
illaa billahil
quvvata illaa
falah' deganida
Kompyuter savodxonligi
bo’yicha mustaqil
'alal falah'
Hayya 'alal
'alas soloh
Hayya 'alas
mavsum boyicha


yuklab olish