After hearing the boss briefly said something, Li Zhongxin changed the subject and asked him to tell everyone about his views on the Asian financial crisis. Li Zhongxin suddenly became excited.

Li Zhongxin looked at the faces below that he often saw on TV in later generations. It was impossible for him to say that he was not excited. At this time, he was studying the Asian financial crisis with these future bosses, and he was giving lectures to everyone.

Li Zhongxin sorted out his thoughts and slowly spoke: "I'm brave enough to discuss with you the formation of the Southeast Asian financial crisis and some opinions. If there is anything wrong, please correct me."

Li Zhongxin sat upright while sitting upright, and his whole body was also awe-inspiring, revealing a very strong confidence. He slowly spoke: "This matter will start from a few years ago. Many people in the world know that because of the successful implementation of the export-oriented economic development strategy, Thailand rose to become one of the four Asian tigers in early 1990.

However, when Thailand was ambitious to become a regional international financial center and accelerate the pace of financial opening, it caused currency attacks due to imperfect market systems and deterioration of economic fundamentals.

Expanding opening up to the outside world does not necessarily force necessary internal reforms and adjustments. Moreover, due to the overshoot of the financial market, the impact of financial opening and trade opening on the real economy cannot be simply compared and extrapolated.

The impact of the former is highly uncertain, so financial openness requires bold imagination and careful verification.

The opening of capital accounts cannot be carried out in isolation and requires a series of reforms to be coordinated. In this regard, Thailand obviously lacks sufficient preparation.

On the one hand, a large amount of capital inflows in the early stage, especially short-term capital inflows, accumulates the vulnerability of the economy and finance; on the other hand, speculators launch currency attacks and must obtain the local currency assets of the target country through the onshore or offshore markets before they can short the local currency.

The work of preventing the impact of capital flows should begin when capital inflows. Especially when the economy is prosperous, it will have a huge attraction to international capital, and this will often lay the hidden dangers of concentrated capital outflows in the future.

If there are many distortions in the open financial market, it may be deliberately used by investors to double the amount and increase the financial vulnerability of the host country.

At the same time, once a currency attack is encountered, increasing the cost of speculators to obtain their own currency or limiting their ability to obtain their own currency is an important means of blocking.

This series of reasons leads to the inherent instability of the fixed exchange rate system under the conditions of free capital flow.

The over-expanding macroeconomic policies caused by the deterioration of economic fundamentals ultimately lead to the collapse of the fixed exchange rate system, and will be affected by the expectations of the private sector, turning the economy from a good equilibrium to a bad equilibrium, and the government shifts from supporting a fixed exchange rate to abandoning a fixed exchange rate, which triggers multiple equilibrium crises of expected self-realization. It will also cause moral risks due to the government's implicit guarantees for enterprises and financial institutions, resulting in excessive speculative investment and asset price bubbles, and the crisis caused by the bursting of the bubble and capital flight.

Thailand is fundamental issues that have evolved into liquidity crisis. The problems of several other countries are similar to those of Thailand. No matter how the reasons for the currency attack occur, the direct result of a fixed exchange rate is often the overvalued exchange rate and then becomes the target of international speculators."

Li Zhongxin slowly told some of his views and opinions, and the expression on his face was meticulous.

At this time, Li Zhongxin did not go to see the big boss's think tanks, because Li Zhongxin felt that the big boss wanted him to simply say this matter, and he would just say it.

Seeing that the boss and the boss' team did not make any sound and remained listening, Li Zhongxin continued to speak solemnly: "Study shows that before the crisis broke out, the Thai baht and other currencies showed overvalued. The fixed exchange rate played an important role in the early stages of economic development. However, with the advancement of financial market-oriented reform, increasing exchange rate elasticity under conditions to prevent overvalued exchange rates is an effective means to avoid being attacked.

The more foreign exchange reserves, the stronger the monetary authorities have the ability to maintain the exchange rate of their local currency in the foreign exchange market.

However, you cannot relax your vigilance against currency attacks by relying on the large amount of foreign exchange reserves. Theoretically, even if a country's foreign exchange reserves can cope with foreign debt and import payments, once residents' confidence shakes and they rush to convert their local currency into foreign currencies, no matter how many foreign exchange reserves are, they may be exhausted.

In particular, foreign exchange reserves formed by short-term capital inflows cannot serve as barriers to deal with currency attacks, because once the situation reverses, this part of the foreign exchange reserves will be consumed first.

In addition, although Thailand and other countries have had relatively abundant foreign exchange reserves, speculators’ targeted strategies have still turned them into ATMs. This shows that high foreign exchange reserves cannot absolutely deter and deter speculators.

International speculators have launched large-scale attacks in the foreign exchange market, and even if they have not formed a monopoly, they have already dominated the market.

Currency attacks are often three-dimensional attacks. There are many linkages between the foreign exchange market, stock market and derivative market, so it is difficult to find the right point to resist.

Off-market funds have considerable flexibility. When you put funds in the foreign exchange market to resist attacks, I will build your stock market. When you put funds in the stock market, I will build your derivative markets.

A country has so many foreign exchange reserves, and problems will arise after multiple rounds of attacks.

Thailand's trading reporting system is imperfect, the government cannot attack speculators, nor can it accurately analyze the funds at this time, and it is finally robbed.

Thailand is one of the four little tigers in Asia. After Thailand's financial collapse, although other countries have also taken some countermeasures, international financial speculators have all come to Southeast Asia. They are coming in full force and have formed a huge scale, which is what we call qualitative change.

When financial speculators attacked Thailand, the amount of funds may be between 5 billion US dollars and 1 trillion US dollars.

However, after entering other countries, the amount of funds has doubled. More and more financial speculators have seen such a situation. Even if these countries use all their means, they cannot resist those wolves.
Chapter completed!