New Risks Emerge In The International Financial Field, And The Global Crisis Should Not Be Underestimated.

The national financial work conference, which has just concluded, stressed that preventing systemic financial risks is an eternal theme of financial work. It is necessary to take the initiative to guard against and defuse systemic financial risks in a more important position.

Overseas people believe that this meeting reflects the wise policy judgment of Chinese policymakers in coordinating the overall domestic and international economic and financial situation.

At present, the world economy continues to recover, but there are some new risks in the field of international finance.

In June, the Federal Reserve raised interest rates for the second time in the year. It is widely expected that the Federal Reserve will raise interest rates again in December this year.

The pace of US interest rate hike is "slow brake", that is, small interest rate increase, steady pace of interest rate increase, and full expectation of market expectations, without excessive "policy surprises".

In addition to raising interest rates, a new important risk associated with the Federal Reserve is to reduce the balance sheet.

In June, the Fed raised interest rates while announces the scale reduction plan.

After the financial crisis in 2008, the Fed purchased a large number of US Treasury bonds and institutional mortgage backed securities through three rounds of quantitative easing monetary policy (QE). Its balance sheet expanded from less than 1 trillion dollars before the crisis to about 4 trillion and 500 billion US dollars.

"Shrinking table" is the reverse operation of "QE". Its impact on the US economy and its spillover effects on the world economy should not be overlooked.

The key to the Fed's deflation is to avoid losing control of long-term interest rates. If long-term interest rates jump sharply, it will hurt the recovery of the US economy. Its spillover effects may also lead to turbulence in global financial markets and induce risks and crises.

Under the influence of the US Federal Reserve tightening monetary policy, new trends have emerged in the monetary policy of major economies such as Europe, Britain and Japan and the issuers of reserve currencies.

Many analysts and investors worry that global interest rates are at historically low levels and that the era of central bank unprecedented purchases of treasury bonds is coming to an end.

The European Central Bank has recently maintained its easing policy, but ruled out the possibility of further interest rate cuts, suggesting that the risk of deflation in the euro zone has disappeared, suggesting that it has carefully considered how to withdraw from the stimulus policy in the future.

The Bank of England kept its benchmark interest rate at a record low of 0.25%, while maintaining the scale of its purchases. However, it expressed the idea of phasing out the ultra loose policy in the next few years, and was developing a counter cyclical capital requirement for banks.

Although the Bank of Japan is still expanding the money supply, it tells the public that it is thinking about how to withdraw from monetary stimulus.

More and more market analysts and investors expect that 2018 will be the year when the easing of global monetary policy has subsided.

The global central bank has been playing the role of "superhero" in this round of market cycles, but this role will end at a certain time.

Risk three: global debt risk

At present, there is no fundamental change in the high level of public debt in the world's major economies.

According to the global monetary monitoring report of the International Monetary Fund in April this year, the ratio of global fiscal deficit to gross domestic product (GDP) will continue to deteriorate in the next two years.

The global government fiscal deficit ratio is 3.4% and 3.1% in the next two years, 0.2 and 0.4 percentage points respectively over the same period last year.

In recent decades, the debt intensity of global economic growth has increased significantly.

That is to say, to drive the same level of economic growth, we need to provide more and more debt increments.

However, debt accumulation usually causes asset price bubbles to expand, and finally detonates the financial crisis.

After the outbreak of the financial crisis, because of the high debt burden, it will make the economic recovery very slow, or even protracted.

Recently, there has been an upsurge of optimism in the US banking industry.

The Federal Reserve approved the dividend and stock repurchase program of 34 major US banks in June 28th, marking the successful completion of the annual pressure test of the Federal Reserve Bank.

After the outbreak of the global financial crisis in 2008, the Federal Reserve decided to carry out stress tests on large banks every year, so as to avoid systemic risk once again.

Federal Reserve Chairman Yellen said in London recently that he would not encounter a financial crisis similar to that of 2008 in his lifetime.

Analysts believe that the full adoption of the stress test on the one hand indicates that the US banking industry has significantly increased its ability to resist risks. On the other hand, this "excellent answer" has been implemented in the context of the relaxation of financial regulation in the United States, and the methodology of stress testing has eased the demand.

From the point of view of financial ethics, the problem of "overwhelming" financial industry in the United States has not been fundamentally solved.

In fact, there are still some local crisis points in the banking sector of the world's leading economies.

The bank crisis in Italy, the fourth largest economy in Europe, is one example.

The Italy government announced in June 25th that it allocated 5 billion 200 million euros to rescue two local banks which are on the verge of bankruptcy.

Risk five: new risks associated with new technologies such as finance and technology

In June 27th, the world suffered a new round of extortion virus attacks. Russia's largest oil company, Ukraine Chernobyl nuclear facilities radiation monitoring system, and many European and American multinational companies have been caught.

Similar to the "eternal blue" blackmail virus attack that broke out in May this year, the equipment being attacked was locked and demanded $300 ransom.

Cyber attacks and blackmail viruses have an impact on the stability of the global financial system.

On the other hand, financial technology (FinTech) is in the ascendant.

The rapid expansion of all kinds of electronic payments, such as WeChat and Alipay, makes the "cash free society" a new phenomenon of global popularization, changing the global financial map.

With this, instant cross-border flows of funds become easier and uncontrollable.

This poses new challenges to global financial regulations and financial regulation.

In addition, the rise of geopolitical instability, protectionism and populism and the formation of new instability are also creating new sources of risk in the field of international finance, which deserve close attention.

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