Financial Crisis Comparison And Enlightenment

Today, with the development of multi-polarization and economic globalization, we should not take a negative attitude towards fast economic development. What we should do is to study the law of its development and try to eliminate its negative effects.From the mid 1970s, developing countries began to adopt structural economic liberalism and macro-economic stabilization policy. They tried to break away from the rigid traditional system, and keep the stability of the national currency at the same time. But, all the efforts haven't achieved much. On the contrary, they caused a series of macro-economic problems. They especially suffered a lot from financial crisis. Financial crisis occurred frequently and proliferated to the whole world through commodity market, currency market and security market. Here comes the question: Why does financial crisis occur? The author studies this question on the basis of previous explorations. First, the merits and shortcomings of the free flow of capital, the international hot money, the derogation of economic basis, then analyses and compares the collapse of the Breton Woods System, the Pound Crisis, Asian Financial Crisis. The conclusion is drawn from the above cases: The crisis occurs at first as the collapse of the fixed foreign exchange rate, then as a system of the collapse of exchange market, financial market, real estate market, stock market. At last, the author discusses the lessons we should draw from financial crisis, including four factors of institution and policy: dilemma of exchange rate institution, developing countries' moderate opened-up fmancial market, stable economic basis and careful anti-crisis policy.