Economic and Financial Crisis

Image via Wikipedia

The economic and financial crisis now leave deep scars in society. Which? It is still difficult to say, but there is no doubt today that he will rethink the organization’s current financial system.To try to see clearly in all this, the group Altercité (*) invited October 20 last Cardinal Godfried Danneels and economist Alexandre Lamfalussy to give their views on this issue.

Chairman of Higher Committee for a new financial architecture, Alexandre Lamfalussy began his presentation with a long inventory. He first recalled that “the occurrence of crises more or less violent part of the capitalist economic system.” He acknowledged however that this crisis is “exceptional in its suddenness and extent. It is certainly the largest we have seen since the years 1929-1933. He is it provided comparable? Not really, because it has its own specificities.And the economist to enumerate the various elements that have resulted in his release that are unique to our time. 
First, the magnitude of the current crisis is partly due to globalization of economy and finance, which is expressed mainly by “greater geographical interdependence of actors.” Then says he, “the deregulation of the market has almost reached its completion point, thereby erasing the dividing lines between different types of financial firms. ”Banks speculate and take risks exaggerated relative to their true mission of financing the economy. They all developed a series of peripheral activities in the mission, such as insurance. Everything is possible now. “Other explanatory factors: the abnormally large financial sector compared to total capitalization (28% during the crisis cons 9-10% a few years earlier) and the widespread securitization. ”The distance between borrower and creditor final end has become so great that the transactions have become totally opaque.” Finally, the very high level of liquidity drives to take undue risk. 

Successful post-crisis 
If the Belgian economist welcomes the various government interventions that we have averted the worst, he insists that they have not prevented the economic downturn and rising unemployment (which has more than doubled toMember U.S.). Certainly, there was a “good coordination among governments and central banks” who have played their role perfectly fire, but now that the hardest part is behind us, we must “tackle the roots of the financial crisis. This is far from clear, recognizes Alexandre Lamfalussy. ”So that remains at the level of generalities, it is easy to agree, but once you enter the details and it addresses the operational principles, each one is tempted to play alone. However, to successfully end the crisis, we need good international governance. “ 
How to fix dysfunctional banking system? The President of the High Committee for a new financial architecture introduced various reforms which he believes should be implemented fairly quickly take concerted action against the misuse of derivatives markets and systems of insurance against risks (CDS) tidying (objectivity) in the operation of rating agencies; correct abuses of remuneration of bankers and traders, developing new standards / accounting rules to avoid cyclical phenomena they help generate. 
To the economist, it is urgent, especially in the European Union. Otherwise, it will be outstripped by the United States that the world impose their own rules. ”If we do not take appropriate action, we are likely to experience recessions worse than we know today,” he said, but called for some humility and caution, since c This is the first time we are faced with such crises. 

Changing attitudes 
Even if the economy and finance are not really his cup of tea, Cardinal Godfried Danneels noted that ethics has never been mentioned often in recent months. ”The Church has no solutions to this crisis,” he admitted humbly. ”It is indeed better than she does not interfere. The only thing she can say is that this crisis will not be solved solely by technical measures. We must also change attitudes and make room for ethics. And in this particular area, the Church has to say. It has a moral view on the situation. “The archbishop of Malines-Brussels, however, regrets that there is no global consensus on our basic values. ”Everyone has their own truth,” he says. ”So, we come to an unmanageable situation. But are we able to invent for ourselves our own way of acting? “He asks himself. ”Are we able to do without a transcendent source?” Cardinal Danneels questioned sharply. 
“We must also realize that there is a leadership crisis,” he says. ”Is it normal that management training is exclusively focused on profitability, efficiency and competitiveness, and they are never invited to wonder why, ask the question of meaning? The leader is not more than that? “The Cardinal, however, must recognize that more and more employers are rediscovering the interior, make withdrawals, take time for them. ”How an entrepreneur can hold up without that kind of parenthesis?” 
The Archbishop of Malines-Brussels is also convinced that the world needs donors sense of religion. ”The Bible,” says he, “is not a book of quotations in which we will draw to illustrate what has been found by ourselves.” She is an inspiration, “a book paradigm “which must always be reread and reinterpreted,” a continual call to conversion and Utopia. “