Go inside the research to see the global consequences ofunethical banking
The Next Revolution in our Credit-Driven Economy: The Adventof Financial Technology integrates market theory and practiceto help investors identify growth opportunities, and to helpregulators create a sustainable economic environment. Author PaulSchulte, former economic analyst with the National SecurityCouncil, draws upon his own decade-spanning research to demonstratehow unethical banking practices provide the brute force that drivespolitical and economic crises worldwide. By unbundling how creditmarkets work, this authoritative guide provides deep insight intocrisis avoidance and detection, successful investment climates, andthe groundwork that must be in place for policy makers to build asound basis for economic growth. Clear, succinct case studiesprovide examples of policy and its effects on economic stability,giving you a stronger understanding of the network of forces thatdetermine how loan/deposit ratios behave around the world.
Countries that lend more than they save consistently get intotrouble, with catastrophic consequences for the rich and middleclass as well as the politicians. This book shows how creditexcesses bring about price collapse in stocks, currencies, and realestate, and provides direction for change in the context of globaleconomics.
- Dive deep into the mechanisms underlying the creditmarkets
- Learn how unregulated borrowing leads to socioeconomiccrises
- Examine real-world policy options through global casestudies
- Discover how credit rises are best detected and avoided
An economic climate in which even the smallest hiccup can havelong-lasting consequences should be the ideal impetus for a closescrutiny of global banking practices and economic policy. TheNext Revolution in our Credit-Driven Economy takes you behindthe scenes for a new perspective, and a more informed look at wherethe world needs to begin changing.
The second half of the book will take a look at the revolutiondriving financial technology. Companies in Silicon Valley andgiants like Alibaba are challenging the landscape for banking. Thishas profound implications for policy makers, banks and for a newclass of entrepreneurs who are developing software which is takingaway market share from bank and challenging decades-old financialempires. The book will explore the reasons why many global banksremain flat-footed. It will go into detail about the new companiesand software that are moving in the Far East and with innovationsin securities, bonds, foreign exchange, retail lending and SMElending. Lastly the book will look at the strategy behind Alibabaand how it will challenge many companies from a powerful baseinside China.
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About the Author
PAUL SCHULTE runs Schulte Research, his own financial services consultancy based in Hong Kong where he is a permanent resident. His clients include sovereign wealth funds, hedge funds, mutual funds, pension funds, exchanges, and regulators. His policy experience includes work with the National Security Council at the White House in the 1980s and the Indonesian Ministry of Finance in the early 1990s. He specialized in investment strategy and research in financials with Credit Suisse, Lehman Brothers, Nomura and China Construction Bank Intl. over a 20-year period.
In the academic world, he is a Senior Fellow at the Center for Emerging Markets Enterprises at the Fletcher School of Law and Diplomacy at Tufts University in Boston, Massachusetts. He is also a Visiting Scholar in the MBA programs at both Hong Kong University and the Hong Kong University of Science and Technology. In addition, he has lectured at MBA programs at Tsinghua, Fudan, NYU Stern School, FGV (Rio), LBS, UCLA, Loyola Marymount, Northwestern, among others.
Table of Contents
About the Author xix
About the Website xxi
Introduction: A Few Numbers Can Crack the Code xxiii
PART ONE How Bank Credit Drives Economics (Not the Other Way Around) and Why
CHAPTER 1 A Few Simple Concepts That Anyone Can Understand 3
CHAPTER 2 Differences between Liquidity and Solvency Are Thin 23
CHAPTER 3 Anatomy of a Credit Crisis and Examples in the Real World 33
PART TWO I Am from the Government, and I Am Here to Help Your Broken Banking System
CHAPTER 4 Socialization of Debt after Mismanagement by Bankers (or, Why Keynesian Economics Doesn’t Work) 55
CHAPTER 5 Why Capitalist Bankers Create Soviet Banking Models When the Going Gets Rough 75
CHAPTER 6 Central Banks Are Carrying the Greatest Load and Will Dominate Outcomes 89
CHAPTER 7 How Bankers and Policy Rescuers Affect Stocks, Foreign Exchange, and Property 103
PART THREE Interlude
CHAPTER 8 Why Government and Institutions Get Suckered into Debt Binges 119
PART FOUR The Revolution in Financial Architecture
CHAPTER 9 Why Is This Revolution Happening Now and Why So Fast? 135
CHAPTER 10 The Revolution in Alternative Investments 145
CHAPTER 11 The Revolution in Big Data and SME Lending in the Emerging World 157
CHAPTER 12 Banking and Analytics—The PayPal Gang, Palantir versus Alibaba, and Hundsun 177