The Financial Crisis has reshuffled the global economy and shown the complexity of financial markets worldwide. Increasing volatility in fast-paced markets adds to a growing complex financial system that seems impossible to control. As a result of a decreasing economy, central banks brought down the main interest rates to support troubled economy with an access to cheap money. Banks used these chances to increase cash by raising their own investment activities and keep the economy afloat. However banks did not grant cheap credits to companies and money stayed hard up. The politics of low interest rates might have been the accurate way but it did not go far enough to secure the recovery of the world economy. After the Crisis and the fail of the Yale Model; investors focus on short commodities to retain them from free trade. Consequently these goods become scarce, their prices increase and at the end of the day investors sell their goods when profits reach their maximums. The price for iron ore and coal for example doubled in just one year. This leads to a stagnancy of the industry and the economy. Experts say that these prices will be the limitation for a better industrial performance. They even believe that production will only take place where resources exist. What are the results of the increase in commodity trade? How are countries, companies and people influenced by a huge raise of prices? Companies suffering from this problem demand for far-reaching regulations. In times of free market economy any kinds of regulations seem hard to enforce. In addition the will for regulation may be questionable due to the dependence of the economy on investments. Is there a chance for adequate regulations that support our economy and do not constrict it? What was the result of Basel III & Co?
From Dialogue Platform - WBD 2011
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