potential Of Financial Services

The share of foreign capital into the banking assets of the countries of Central and Eastern Europe (CEE), now estimated at 75% to 80%, is anything but an accident. This trend was encouraged by the movement of bank privatization. Trade observed over the past decade and to develop intermediary capable of mobilizing domestic savings. Above all, this figure demonstrates the potential growth in the region to major markets such as Russia, Poland or Hungary, and masks the presence of unequal foreign financial players.

Specifically, several German and Italian banks such as Commerzbank and Unicredit or Austrian and Swiss, the image of Erste Bank and Raiffeisen, are already well established, indicating that geographic proximity was a key factor in the conquest of the new Eastern markets. Also, funds provided by these states and for the CEECs in the 1990s have probably facilitated the implementation of their banks. Most surprising finding, the "global players" (HSBC, Citibank ...) have invested less, preferring other growth markets like China. Similarly, the French presence is limited, with the exception of Societe Generale which CEE a major focus of its development.


Yet these countries have managed to restore their economies and now represent a real alternative to the erosion of traditional markets of Western Europe. To get there, the CEECs, ordered to move towards the convergence criteria, have benefited from European integration, or at least his perspective, positively impacting their economies. Thus, before adopting the euro in 2007, Slovenia has seen its GDP grow by 5.2%, its unemployment rate drop to 6% and inflation at 2.6%.

The Currency

The dollar Thaler born in the mountains of Bohemia in 1520, is very young face, for example, the dinar Arabic, the denarius of the New Testament. Longevity also a bit mysterious, like everything related to money. After all, why accept a piece of gold, silver or shell as payment? Because this object is easily transformed into jewelry, thus satisfying a need for adornment supposedly inherent in all humanity. But then an austere and puritanical society should not prohibit it and the currency is limited to barter? In fact, the seller has accepted this sign because he knows that he will pay him tomorrow or something, which means something more durable, the day after tomorrow. And he knows because it is the custom, or rather the law, which de facto limits the jurisdiction in which money circulates. Moreover, more power is distant and changing the law, more monetary support of the sign must be rare and valuable: Darius fought for gold, silver and Pericles Leonidas iron.

Therefore, only legitimate democracies of the twentieth century were able to permanently accept the greenback as currency transactions, and reserve account. Only, indeed, such a system allows the public to believe sincerely that the State work for the common good and not primarily for private benefit, especially legally. Contract law is respected by the courts, the promised values do not fluctuate overnight at the discretion of the parties, as is often the case with an arbitrary power, so a simple piece of paper is a reserve credible value. Even today, this is not apparent everywhere and one can rightly assume that the strong demand for gold, saving the Indians and, increasingly, the Chinese in fact reflect a deep distrust of these people face their leaders and their judges. It is thus not surprising that any lasting weakening of the statutory authority is accompanied by currency turmoil.

The Currecny and The Inflation

If the tickets are not hoarded, but used as soon as possible, the rampant inflation is not preprogrammed. This requires, besides the loss of confidence in the state, a simultaneous collapse of production, caused for example by the French occupation of the Ruhr in Weimar Germany, the nationalizations of the early Soviet unbridled or hunting white farmers in Zimbabwe of Mugabe, to name only the most famous examples of hyperinflation.

Such phases have been rather rare, especially given the tremendous growth that the world has known these past hundred years. Is that the introduction of a purely fiduciary currency regime has liberated our economies of these brakes ancestral: the lack of credit and therefore money. Ever it was no more acute than in the standard purest gold, between 1870 and 1910, during which nine successive recessions in the United States, the Bank of England has often had to temporarily lift its cover- Gold, protectionism grew at the same time as the social discontent. Between the rush California and the opening of South African mines, the world sorely missed because of the yellow metal to properly feed its growth potential. So - as some said - that humanity is not crucified on a cross of gold, while central banks have gained powers when they have not simply been created as the U.S. Federal Reserve and the National Bank Switzerland. But the link to gold remained still too strong since it is probably he who explains the magnitude of the Great Depression of the 30s.

Faced with these shortages and crises, and despite all its faults, the monetary regime fiduciary past fifty years seems rather beneficial. Certainly, central banks create money by their own judgments, frightening those who do not understand the value of a currency does not lie in its coverage, but in its ability to purchase. Now this creation is not reckless because the tickets are always accepted with gusto by those who are lucky enough to receive it. For accounting purposes, rather, they seem-backed IOUs, but it might not be the case if they were not put into circulation through banks.

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The Economic Crash and The Future of Dollar

The death of a currency is essentially a political thing. It may be decided in the cold, as in the old currencies of the euro area. It can also - and often does - disappear because the company no longer operates legally. While it may be pessimistic about the future of the United States, but only Cassandra argue that this country is on the verge of collapse. So the dollar will survive even as the U.S. economy recovers, the federal government has ever borrowed so cheap and instead of inflation, deflation is more threatening, thereby increasing Americans even more attractive for their money. Certainly, the greenback could get by in his corner, but losing its prerogatives international. However not forget that more than a store of value is the motto franca of global trade, one in which most prices are rank, and transactions are settled. Neither the renminbi still inconvertible nor faltering euro area can play this role today and even tomorrow. This will be a fortiori not the case of a basket type SDR, an instrument that can be used for transactions, no one ever knowing which component of the basket used. As proof, the ECU was not only becoming euro currency. All proposals to reform the international monetary system based on such a cart so that saliva are lost. Unless of course, like the European Monetary Union, we created a world central bank issuing, say, bancors, as Keynes had proposed at Bretton Woods in 1944, an idea that nobody is going to seriously defend after disappointments that one size fits all policy of the ECB has brought.