Recent financial crisis makes some people thinking that the science of finance declined, but the others suggest that it's the time to show the power of science of finance. What do you think of?
Response:
A worldwide criticism often heard these days is that the financial instrument is wrongly used in the monetary market. The famous 1850 build Lehman Brothers Holdings Inc became quick bankrupted, the stock fall to the lowest part in the history; the unemployment increased sharply…almost the whole nation loss confident in the financial crisis. However, the circumstances permit more secure and stable financial instrument to be used under the supervision of the government and IMF. And some people firmly believe the value of the financial will certainly bring the opportunity for lenders.
As far as I am involved, the global crisis coursed by the development of the financial instrument has a long time impact of the economic slump. Although the government stimulus efforts will help maintain the 8 percent economic growth, it needs at least 4years to recover from the crisis. People can live without stocks but they can’t live without houses. Thinking about the soaring price of the flats, do you really want the financial institution operate your money like put water in the sponge?
Secondly, financial instrument has a close relationship with the accounting scandal. Only two months after Bernard Madoff’ s case, Sir R. A. Stanford has sued by SEC for corrupting eight million dollars which made another huge loss of banks and invertors. It is must be known that market is decided by the demand not the financial products. More focus should be paid on the capital market in order to create an economic growth not a numerical growth.
Admittedly the financial instruments have played an important role in the past decades and earned a very high value in the capital market. The post-crisis is still really unpredictable. The value of the financial need time to justify.
by CHB
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