Will the central banks to rescue the global financial system?

drama,
unfolded in Greece and China,
It had a sobering effect on the world,
which was sure to iron that
central banks can solve almost
all economic ills. Global markets
basking in the glow of promises Mario Draghi
to do "whatever it takes" to
preserve the euro. Banking and credit
collapse, broke out eight years ago,
It was, as it seemed, neutralized
decisive actions of regulators.
Central banks around the world - from the US to
Europe and Asia - calmed financial
markets, reduced their interest rates
published a number of new
money to ward off fears of systemic
disruption and deflation.

But even if
accept the fact that central banks will do
everything possible - no matter what: for
Do save the euro if the inflation growth,
whether to support the stock market - it
will not necessarily mean that
efforts will work forever.

Europe

Not many people who
remembers that famous promise Mario
Draghi was preceded by the phrase "Within
our competence. " Now, in the face
the first in the history of the EU exit
countries of the single currency area,
the question of the competence of the regulator rises
in full growth. Of course, the ECB does not want to
squeeze out Greece from the eurozone. But him
"All that is required" may simply
not enough for it to save
the integrity of the euro zone. Who funds
ECB endlessly on funneling state of emergency
financing insolvent
Greek banks. But while Greek
the government is in a state
confrontation with the international lenders,
The ECB can not wave a magic wand
monetary support without violating their own
rules.

European
the controller continues to insist on
that he will do "everything possible"
to prevent the spread
Greek infection to other markets
eurozone. There is no doubt that
"SuperMario" is really something
achieve in this field. But the problem,
related to the exit of Greece from the eurozone,
connected not only with financial danger
but also politically. other voters
in the euro area could also get tired of
exhausting austerity measures. AND
Now this kind of thing are out
ECB control.

But not only
European regulator is now
during hard test
the effectiveness of its activities.

China

Drama that
playing out in China, too,
He deserves great attention from the point of
of how much can
make the central bank of the country in a situation
crisis. It is now in serious doubt
People absolute capacity
Bank of China to the management of the second
largest economy in the world.

No doubt
that the People's Bank of China has helped
to form a bubble within the stock
last year. Easy money, cheaper
loans, attempts to open the stock
market for foreign investors,
loud announcements - all this has inflated Shanghai
Composite double. now is the
moment of reckoning: the central bank and
state regulators desperately
trying to stop the collapse of the powerful,
who for three weeks disappeared into thin air
$ 3 trillion of
the value of Chinese stocks.

deep
concern all followers of the idea of ​​"all-powerful
central banks "is the fact that not
It helps nothing: no reduction of interest
rates or infusion of a powerful stream
liquidity. People's Bank of China did not
received a response from the market, which
He continues to crumble.

Considering,
that 85% of stock trading in China - it is
activity of small retail investors,
economic benefit of the consumer
moods can be quite
significant.

If the People
Bank of China will not be able to maintain its
the stock market, this is the first case,
when major central banks failed
impact on target asset markets.
Investors may ask the question:
that if the global economy
It is approaching that inflection point, after
whose role and impact of the activities
central banks will begin to decline?

Global congestion

economists
Bank for International Settlements on June 28
warned that the loss of control
central banks leaves markets vulnerable
for any major accident or sudden
the global recession. They call it
One of the most disturbing today
threats to the global financial system.
In its annual report, they write:
"Monetary policy is too
It has long been congested. It is necessary to step up
profound economic reforms to
remove the pressure from the markets overheating
ease monetary policy and
reduce high risk debt
governments around the world. Probability
strong turbulence will increase
every day. The stronger the stretch
gum, the more it will strike next. "

The only
central banks in the world, which today
conditionally ready to raise interest
rate in the coming months - is the Fed
The United States and the Bank of England. However, it is also, in
turn, could greatly destabilize
the global financial system. With another
hand,

if China
or Greece is now a full-fledged organize
financial shock, then the Fed and the Bank of England
find themselves in their own trap. For
they just do not stabilize the situation,
will be able to reset the interest rate,
because it is already at zero.

And what
It will take place at this point looks
in the eyes of market experts a little scary.