The Next Revolution in our Credit-Driven Economy

The Advent of Financial Technology
Wiley (Verlag)
  • erschienen am 29. Juni 2015
  • |
  • 240 Seiten
E-Book | ePUB mit Adobe DRM | Systemvoraussetzungen
978-1-118-98961-6 (ISBN)
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.
1. Auflage
  • Englisch
  • Hoboken
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  • Singapur
John Wiley & Sons
  • 4,40 MB
978-1-118-98961-6 (9781118989616)
1-118-98961-9 (1118989619)
weitere Ausgaben werden ermittelt
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.
Acknowledgments xvii
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
Appendix 195
Bibliography 197
Index 199

Advance Praise for The Next Revolution in Our Credit-Driven Economy: The Advent of Financial Technology: The Advent of Financial Technology

This book is a timely and comprehensive description of the rapidly changing financial world. It covers not only the changing role of financial institutions but is also one of the first to analyze the profound impact of technology and big data on financial institutions and transactions. There is no question that the tens of billions of dollars in fines levied on the banks will change their ways of doing business. But, when a world top bank announces that it is hoping major institutional depositors will withdraw at least a hundred billion dollars in deposits, something serious must have happened. The book covers, in everyday language, the lead-up to and the current status of this transformation. Best of all, the author draws on his extensive BRIC experience to differentiate an increasingly regional market despite much hyped "globalisation." It is also a must read for the practitioner, as the author goes beyond descriptions to investment strategies.

-Charles Liu, founder and former chairman of Hao Capital, and financial technology pioneer in China

Throughout history, dictators have abused their control of finance to subjugate people and destroy economic vitality. Paul Schulte's exceptional understanding and international experience permit him to show simple metrics by which all can measure when and how finance is abused to the detriment of investors. He shows, moreover, that advancements in technology now offer both the means and a process by which the world can end this sad saga, for everyone's benefit.

-Frederick L. Feldkamp, attorney; co-author of Financial Stability: Fraud, Confidence, and the Wealth of Nations (Wiley, 2014)

Paul Schulte's book is brilliant, witty and has penetrating simplicity. He moves beyond connecting the dots for a sneak peek on how online-to-offline credit is the Jedi lightsaber which is behind the rise, fall, and renaissance of livelihood, lifestyle and power hubs globally. His book prisms the perfect storms and vast opportunities as Wall Street, Corporates, Government and Digital Continents align and disrupt. Spotlighting the urkraft of bank credit, Schulte presciently lays out how mobile, wireless and cloud data analytics are turbocharging the jump over the garden wall for vast pools of money-the lifeblood of business, nonprofit funding and government. The canvas Schulte unrolls reads like a thriller in fiction-entertaining and more jolting because it is nonfiction.

-Camille Tang, president and co-founder, ConvenientPower Group

After the global financial crisis of 2008, the Queen of England wondered why all the country's economists had failed to sound warnings. Financial instabilities are inherently unpredictable; all you can do is clean up afterwards, quoth Greenspan. But in this important book Paul Schulte explains how crises can indeed be foreseen. For our lifetimes, economic "growth" has been driven by the expansion of credit. Failure to account adequately for the overwhelming importance of credit has led governments and central banks to miss obvious warning signs. Warning signs of another type are being missed today by many of the world's major banks. The second half of this book analyses how their revenue streams are under attack, while their costs are driven ever higher by regulators and governments. This will inevitably lead to the ultimate irony: "too big to fail" will be rephrased as "so big, it must fail." Customers may be winners; shareholders assuredly will not. At least Queen Elizabeth and Jamie Dimon should read this book. You should, too.

-Nick Sallnow-Smith, former UK Treasury civil servant; former company treasurer and ex-banker

This book ties together the unethical practices of banks with the growing financial and wealth-gap crisis destabilizing our world.

-Max Keiser, editor and host, The Kaiser Report

Credit allows us to spend money we don't have, to buy goods we don't want, to show off to people we don't like. More prosaically, excessive credit creation over the past half century has fuelled a series of rolling asset price booms and busts to which the solution has always been to create even more credit. Schulte, unlike most policymakers, understands the relationship between credit and real life. This timely work explains these inter-linkages and how the technology and big data revolution is spawning new models of financial intermediation that threaten the very existence of traditional banks.

-Simon Ogus, CEO, DSG Asia Limited

Paul is one of the most astute commentators in his understanding of the financial architecture globally. This book gives the reader a ringside seat into the fast evolving creative destruction that is engulfing the financial services industry in the aftermath of the global financial crisis which has altered the regulatory landscape permanently. This interplays with the lightning-speed evolution of Internet-led fulfilment of underserved areas in this space. A tectonic shift is in the making. This book is a must-read for anyone following financial markets.

-Amit Rajpal, global banks portfolio manager, Marshall Wace

This book will bolster Paul's already substantial reputation as a stimulating, original thinker and skilled polemicist. Written in clear, declarative sentences (as he says, "anyone" can understand the arguments), the first section of The Next Revolution in Our Credit-Driven Economy argues for the central role of credit and the credit cycle in economic analysis and financial valuation. He offers insightful recommendations on investment in multiple assets classes through the credit cycle. The book's second section is a wakeup call to bankers on the disruptions to commercial banking's "business as usual" attitude posed by new financial technologies. His observations are telling; his conclusions persuasive.

-Eugene K. Galbraith, deputy president director, PT Bank Central Asia Tbk

Mr. Schulte brings a definitive element of "been there, done that" to his insightful text about how the financial world truthfully operates. As he states from the beginning, he wants to explain it like he was talking to his grandmother, and he delivers. That which appears to be beyond the grasp of the loudest spokesmen of today's Economic Ivory Towers, Paul lays out with the clearest of common sense and the most obvious of logic-CREDIT MATTERS! This text should be highly recommended to any student of Finance and Economics. It should be made compulsory for any practicing central banker.

-David Dredge, co-chief investment officer, Convex Strategies Group, Fortress Investment Group

Paul Schulte elucidates the impact of the credit cycle on our economies, our politics, and our lives. In the process he provides tools for us to profit from the cycle and to avoid catastrophe when it turns down. The book should be read by financial professionals, regulators, political leaders, and anyone trying to manage a portfolio, even a personal portfolio, of investments.

-William Overholt, president, Fung Global Institute

Paul Schulte's book outlines in depth the growth of credit in our economy and the importance of the credit cycle as a key driver in both economic growth and investment returns. His illustration of the pendulum swing of the credit cycle and identification of the consistent mistakes made during boom/bust cycles will surely be helpful to those who make business and investment decisions across the global markets. Schulte then helps guide us to the beginning of the cross-section of technology and finance, a merger of two worlds that will likely dominate the global economic discussion for the next decade.

-Minh Duc Do, senior vice-president, Gerson Lehrman Group

Facebook, Alibaba, Big Data, geopolitics, crowdsourcing, the Great Recession and 13,000 pages of the Dodd-Frank Act. What do all have to do with an industrial revolution in banking and financial services? To quote William Gibson, the revolution is already here; it is just unevenly distributed. Bankers and the regulators who are meant to provide the guardrails for the bankers may not quite know that the revolution is underway; the visionaries, the paranoiacs and the insurgents know it already. Once this lucidly written and brilliant account by Paul Schulte is evenly distributed, everyone will know about the revolution, what the revolution is being driven by and who might be expected to survive it. With compelling explanations of the impact of credit on economic fundamentals, the changing global financial architecture and chapters on the anatomy of a credit crisis, readers get a "front row seat in this technological slugfest." Those who do not pick up a copy of this book do so at their peril.

-Bhaskar Chakravorti, senior associate dean of International Business and Finance, the Fletcher School at Tufts University; founding executive director, Institute for Business in the Global Context

Schulte has a rare gift for explaining in simple terms the extraordinary importance of banks, credit, and regulators in modern economies-how their irresponsible behavior...

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