1. The international capital market pushed international capital from Europe into emerging market countries such as the United States and Australia at that time.
It is generally believed that during the 50 years from 1870 to 19 14, when the classical gold standard prevailed, international capital maintained a high degree of liquidity, and a large number of them poured into the United States and Australia from Europe. 19 14 or so, the average annual capital outflow in Britain accounts for 5% to 9% of GDP, the capital flow in France accounts for 2% of GDP, and that in Germany is about 3%. Among the capital importing countries, Australia's capital inflow accounts for 9.5% of its GDP, and Canada's capital inflow accounts for 6% of its GDP.
2. Public institutions are the main body of international capital market activities. At that time, the international capital market activities were mainly manifested as follows: the governments and departments of borrowing countries issued a large number of fixed-rate bonds to the capital markets of Britain, France and Germany; American creditors set up subsidiaries abroad, which are controlled by holding more than half of the shares (or operating exclusively).
3. The international capital market has strong volatility, especially the interest rate of international bonds has been greatly adjusted with the changes of time and country.
4. Due to the changes of macroeconomic conditions in capital exporting and importing countries and sudden political and economic events, capital flows will initially rise and fall. 1929- 1933 The Great Depression triggered by the global financial crisis led to a large-scale debt default, which severely hit the activities of the international capital market. In 1930s, most of the capital flows took the form of short-term capital flight under the influence of widespread expectation of currency devaluation, war and political persecution. This situation continued until the end of World War II. After World War II, international private bank loans and securities investment were restrained to some extent. Capital can't break through geographical restrictions, and it is more manifested in the flow outside the currency issuing country. Most market transactions take place abroad, that is, Eurodollar transactions.
The characteristics of international capital market activities in this period are:
1. International capital market activities belong to the category of European markets and European currencies. The Bretton Woods system, which rose from the ruins after the war, laid the foundation of the international financial order in the second half of the twentieth century. At the same time, the relevant agreement of the International Monetary Fund, as the core of the system, clarified the basic norms of international capital flow under the Bretton Woods system. At the beginning of the implementation of the Bretton Woods system, countries generally controlled capital flows to varying degrees, and the capital under strict control bypassed the control and flowed outside the currency issuing countries, forming the embryonic form of the European capital market. European capital market is not only an inter-bank market, but also a market for government to raise funds. At the same time, it also provides lending services for large companies, and commercial banks are the core of this market. The European capital market has a wide range of funds and a huge amount. It is denominated in a variety of convertible currencies, which fully meets various borrowing needs. Commercial banks are free to operate, with flexible and simple loans and rapid capital arrangement.
2. Capital flows are concentrated in the form of official assistance and direct investment. For a long time after the end of World War II, the mainstream of capital flow was large-scale international aid, and direct investment was gradually revived. The reconstruction plan of Europe after World War II caused huge official capital flows. The Marshall Plan and Truman's fourth aid plan implemented by the American government led to a large amount of dollars flowing into Europe. From1July 1945 to1June 30, 1955, the United States provided 3.87 billion US dollars in loans to the Federal Republic of Germany according to the Marshall Plan. 1In February, 945, the United States signed a financial agreement with the United Kingdom, and the United States provided the United Kingdom with $3.75 billion in low-interest loans.
3. While leading official capital flows, the United States has also become the main body of private capital flows. According to the OECD international capital market statistics, 195 1 year, the total international bond issuance is 995.4 million US dollars, of which 922.6 million US dollars are issued in the US market, accounting for 92.69% of the total international bond issuance. Throughout the 1950s, the United States provided $7 160 1 billion for international bond issuance. Since 1960s, American commercial banks have expanded their international business and opened branches in foreign countries, especially in Europe. These banks actively develop credit business by using the huge amount of funds they hold, which provides a new source of funds for the European money market. From 65438 to 0973, with the change of exchange rate system from fixed to floating, some countries such as the United States gradually lifted the control over cross-border capital flows, and international capital flows entered a new development period. During this period, two oil crises, 1973- 1974 and 1979- 1980, and the appearance of petrodollars had a decisive impact on capital flows.
1, oil crisis and petrodollars
Since 1970s, oil, as an important energy source, has replaced coal as the main part of world energy consumption. The production and consumption of oil are extremely unbalanced. The United States, Europe and Japan produce less than 20% of the world's total oil consumption, but their oil consumption accounts for 70% of the world's total oil consumption, so they have to rely heavily on imports. Changes in oil prices directly affect the performance of the global economy.
Middle East countries are major oil producers. 1960 In September, the third world oil-producing countries established the Organization of Petroleum Exporting Countries (OPEC) to change the unreasonable situation of low oil prices for a long time. Since 1970s, members of the Organization of Petroleum Exporting Countries (OPEC) have gradually mastered their own oil resources through equity participation and nationalization.
In the early 1970 s, the exchange rate of the US dollar was lowered, and the prices of finished products in western industrial countries rose accordingly. As the oil trade is settled in US dollars, the oil export income continues to decline with the exchange rate of US dollars, and the oil-producing countries suffer heavy losses. 1973 After the outbreak of the Middle East war in June, the members of the Organization of Petroleum Exporting Countries, on the one hand, accelerated the process of nationalization of oil production, on the other hand, greatly increased the oil price, which increased from the previous 3.0 1 USD to1.65 USD in June 1974. 1979 and 65438+ 10, the organization of petroleum exporting countries raised the oil price again, and adjusted the price of crude oil per barrel to 65438 USD +04.327. By 198 1, the oil price in the international market rose to $34 per barrel.
The sharp rise in oil prices has had a great impact on the world economy, especially the economies that rely heavily on oil imports have suffered serious external shocks. The flexible adjustment of exchange rates of major currencies in the international financial market enables these economies to absorb such external shocks.
With the sharp rise in oil prices, the current account surplus of OPEC members is huge, reaching $6,565,438+700 million in 1974, $92.84 billion in 1980 and $3,360 in 1973/981year. This is the so-called oil surplus fund, also called petrodollars, because most oil surplus funds are expressed in dollars.
2. Characteristics of global capital flows during the oil crisis.
The characteristics of capital flow during the oil crisis are as follows:
① The accumulation and flow of petrodollars promoted the further development of European capital markets. About one-third of the funds available to members of the Organization of Petroleum Exporting Countries are invested in the European currency market, most of which are in the form of Eurodollar deposits. Arab banks account for 26.5% of the total European monetary loans of $90 billion in 198 1 year. Therefore, the European capital market has not only provided a channel to promote the return of petrodollars, but also gained new impetus for further development.
The flow of petrodollars set off the climax of private commercial banks providing loans to developing countries, and also laid the groundwork for the outbreak of Latin American debt crisis. After the first oil crisis, non-oil-producing developing countries ran huge current account deficits for a long time and had to borrow a lot of foreign debts, so the demand for funds rose rapidly. In order to obtain relatively safe assets in developed countries, the member organizations of the Organization of Petroleum Exporting Countries lend most of their petrodollars to private commercial banks in developed countries. In 1970s and 1980s, the economy of developed countries generally stagnated, the nominal interest rate remained at a low level, and the real interest rate after deducting the price factor was negative, so private commercial banks increased their loans to non-oil-producing developing countries to obtain higher interest income. During the oil crisis, the fund-raising activities in the international capital market increased significantly, especially in non-OECD countries.
After 1982, the member countries of the Organization of Petroleum Exporting Countries began to have current account deficits, and the accumulation process of petrodollars was forced to be interrupted. In this way, the source of funds for private commercial banks in developed countries to issue loans to non-oil-producing developing countries is unsustainable, and the conditions for developing countries to obtain international loans have deteriorated sharply. /kloc-in the 1980s, as most middle-income developing countries became heavily indebted borrowers, they faced debt repayment difficulties and capital flows began to show signs of contraction.
During the ten years from 1973 to 1982, the total foreign debt of non-oil-producing developing countries increased from 103 1 billion to 842 billion, with an annual growth rate of 18.8%, of which the annual growth rates of government loans and private loans were/kloc-respectively. Among the high total foreign debts, short-term credit grew rapidly, the term of international debt was obviously shortened, and the proportion of floating interest rate debt rose sharply, exceeding 40% of all foreign debts, reaching 1980. At the same time, the external debt repayment pressure of developing countries has been rising. From 1973 to 1982, the amount of debt service increased from 179 billion dollars to 93.2 billion dollars, and the proportion of debt service to export income (debt service rate) increased from 15.9% to 23.9%, of which interest service accounted for the proportion of export income.
While non-oil-producing developing countries are over-indebted and structurally unbalanced, the changes in the international market environment since the 1980s have directly led to the outbreak of debt repayment crisis in such countries. From 1980, the economic recession in western countries was serious, and the real gross national product and the growth rate of world trade in developed countries began to decline, until 1982 showed negative growth. The terms of trade of developing countries have deteriorated sharply, the import demand has dropped sharply, the export income has dropped rapidly, the current account deficit has increased, and the ability to repay foreign debts and interest has declined.
While the economy of western countries continues to decline, the Reagan administration of the United States has adopted a tight monetary policy, resulting in three phenomena: high interest rate, high exchange rate and high inflation rate.
Due to the high proportion of foreign debts denominated in US dollars in non-oil-producing developing countries, the rise of the US dollar exchange rate directly aggravates the actual debt settlement of such countries, that is, the burden of principal and interest flowing to creditor countries.
Due to the high interest rate in the United States, other developed countries have also raised interest rates. The average nominal interest rate of short-term funds in the seven western industrialized countries rose from 9.2% in 1979 to 12.9% in 1982, and the average nominal interest rate of long-term funds rose from 9.3% in 1979 to 1982. As the floating interest rate foreign debt of developing countries exceeds 40% of the total foreign debt, the rising interest rate leads to the increase of debt repayment pressure. According to the calculation of the International Monetary Fund, for every percentage point increase in the interest rate in the international financial market, non-oil exporting countries will pay an extra $4 billion in interest. Based on this calculation, Brazil and Mexico will pay an additional $750 million in interest, and non-oil-producing developing countries will pay an additional $20 billion. Therefore, after 1979, many new debts borrowed by non-oil-producing developing countries are mainly used to pay interest.
Under the double pressure of internal and external, in March of 198 1, the Polish government, with a total foreign debt of $26 billion, was unable to pay the due principal and interest of $2.5 billion, which opened the debt repayment crisis of non-oil-producing developing countries. 1In August, 982, Mexico announced that all its foreign exchange reserves were basically exhausted, and it was unable to repay the principal and interest of the due debts; In September, Brazil, the largest debtor country in the third world, announced that it urgently needed a new loan of 654.38+075 billion US dollars to solve the repayment difficulties. In 65438+February, Argentina proposed to negotiate with western creditors to reschedule debts. More and more countries are involved in this debt crisis: in Latin America, except Colombia and Paraguay, other debtor countries have asked for an extension of the debt repayment period. In Africa, Sudan, Morocco, Togo, Central African Republic, Madagascar, Zaire, Zambia and other countries have fallen into the abyss of debt crisis. In Asia, Indonesia and the Philippines also applied for assistance from the International Monetary Fund to solve the debt payment problem.
After the debt crisis broke out, debtor governments, creditor governments, creditor banks and international financial institutions took a series of measures to gradually curb the spread of the crisis. However, this crisis has had a far-reaching impact on the activities of international financial markets.
The characteristics of international capital market activities during this period are as follows:
1, the expansion of capital flow scale is extremely unstable. In the early 1980s, the total amount of cross-border capital flows dropped from nearly $200 billion in annual financing to about $654.38+050 billion, with a cumulative decline of more than 20%. After 1984, the total amount of financing in the international capital market rose sharply again, with a cumulative increase of more than 70% in three years, showing strong instability.
2. The international capital flow between developed countries was less affected by the debt crisis and recovered quickly in a short time. 1982 and 1983, the capital inflow of OECD countries decreased by 14% and10/%respectively, slightly higher than the average level of the international capital market. However, after 1984, the financing scale of OECD countries rose rapidly, and the capital inflow exceeded the total level before the debt crisis.
3. The capital inflow of developing countries has entered a long period of contraction. After 198 1 reached the highest level of $41900 million, the international capital market financing of non-OECD countries entered a six-year decline period, and the total annual financing once fell to $2 1 1 100 million, compared with198/kloc-. It was not until 1993 that the capital inflow of non-OECD countries exceeded the level of 198 1 year, reaching $65.342 billion. Therefore, under the influence of the debt crisis, the capital inflow of developing countries contracted for as long as 10 years, which happened to be a lost decade for Latin American countries. After 1988, the scale of capital flow has achieved unprecedented development, and the transnational flow of capital has entered a new stage of globalization.
The total amount of international capital market financing increased from $369.4 billion in 1988 to $832.2 billion in 1995, more than doubling. By 1998, the amount of financing in the international capital market with international bond issuance, syndicated loans and other debt instruments as the main contents reached1224.7 billion US dollars, an increase over two years ago.
Schedule 1 International Capital Market Activities (1988- 1995) (millions of US dollars)
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Time: Annual growth rate of total international market financing% Total financing of OECD countries and total financing of non-OECD countries.
1988 369393 2 1.64 3323 18. 1 26557.5
1989 3853 13.6 4.3 1 347776.2 24605.8
1990 36 1430.9 -6. 19 3 16653.5 29358.8
199 1 432500.4 19.66 379478.2 38022.7
1992 458255. 1 5.59 404420.8 32960.2
1993 625835.9 36.57 539776.5 65348.2
1994 669702. 1 7.0 1 587336 69992.9
1995 832243 24.27 732 169.3 824 12
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Source: OECD International Capital Market Statistics 1950- 1995.
Since the 1980s and 1990s, the most striking feature of international capital market activities is the globalization of capital flows, which is embodied as follows:
1. The impact of cross-border capital flows on economic development has greatly increased.
While the total amount of capital flows has increased substantially, the relative proportion of cross-border capital flows in its economic scale has increased significantly. According to the data of cross-border transactions of securities calculated by the Bank for International Settlements according to the balance of payments statistics, from 65,438+0,975 to 65,438+0,998, the proportion of various securities between residents and non-residents in western countries rose rapidly, and that in the United States rose from 4% to 230%. Germany rose from 5% to 334%, Italy from 1% to 640%, and Japan from 2% to 9 1%. The fastest growth period was concentrated in the late 1980s and early 1990s.
2. The speed of capital flow has risen rapidly, and capital liquidity has reached a high level.
With the rapid expansion of capital flow, the rapid development of financial technology, the wide application of financial innovation and the development and popularization of various financial derivatives, the speed of international capital flow has been greatly improved. According to the survey conducted by the Bank for International Settlements on the nominal daily trading amount of the global foreign exchange market, by April of 1998, the trading amount had exceeded10.5 trillion US dollars, an increase of nearly 50% compared with the last statistic of 1995, and the average annual growth rate for three years was 14%, which greatly exceeded/kloc-. Obviously, the expansion of foreign exchange market transactions is accelerating.
3. More countries and regions enter the international capital market with more favorable conditions.
At this stage, emerging market countries have once again become an important target of capital flow, the conditions for developing countries to enter the international capital market have improved significantly, more and more countries have participated in international capital market activities to raise funds, and various obstacles and barriers to capital market entry have been eliminated.
4. International capital market prices tend to converge, and interest rate fluctuations have obvious linkage. The globalization of capital flow makes the financing conditions of different countries and regions in the international financial market tend to be consistent, and the interest rate gap between different countries narrows. In the past 20 years, the gap between the benchmark interest rates of central banks in major industrial countries has been narrowing. After entering the 1990s, the benchmark interest rates of American, German and Japanese central banks once converged to 6%. Since then, although there has been a certain degree of separation, the overall trend of ups and downs is basically synchronous, and the spread tends to be stable. In addition, with the introduction of the euro, the interest rates of major European countries took the lead in convergence.
Judging from the adjustment of interest rate level, the decisions of central banks in major western countries have significant relevance, and almost every interest rate adjustment in major countries will cause rapid reactions in other countries. Looking at the changes in the international capital market in the past century, the main factors that promote the globalization of the international capital market include: the development of productive forces, the deepening of international division of labor, the cyclical changes in the world economy, the development of international trade, the internal demand of financial markets and the changes in interest rates, the development of financial innovation and financial liberalization, capital account management policies, the international monetary system, multinational corporations and international organizations. The attributes of the above motivation can be divided into two parts: the objective needs of economic and financial development and the artificial promotion of relevant countries or international organizations.
Generally speaking, the driving force of the world economy and international trade itself should belong to the category of objective inevitability; The internal driving force generated by the rapid rise of financial activities is both objective inevitability and artificial promotion, but relatively speaking, its objective inevitability is stronger; In the process of capital account opening, the policy promotion of developed countries has played a certain role, but this opening process is the result of the continuous expansion of foreign economic and trade ties of more countries, so it also has an objective and inevitable side; As the norm of international monetary relations, the overall policy orientation of the international monetary system reflects the wishes of major western industrial countries to a greater extent; The policy adjustment of multinational corporations and international organizations can be classified as artificial promotion (see the table below for details).
Under the assumption that the above analysis is reasonable, the globalization process of financial capital promoted by the above seven factors is the inevitable result of the adjustment of the laws of world economy and financial activities on the whole, but it also reflects the wishes of some developed countries to some extent, and has the artificial promotion side.
From another perspective, the globalization of capital flows and the opening of domestic financial markets are interrelated and unique components in the process of financial liberalization. The liberalization of capital flow means that residents can participate in international financial market activities, domestic consumers can buy services provided by foreign financial institutions, and domestic financial institutions can provide financial services to foreign consumers, thus further promoting the liberalization of financial service trade from both internal and external perspectives. The final result is the maximization of capital benefit and the optimization of resource allocation, which is the market performance of financial globalization.
The particularity of the globalization process of financial capital determines the complexity of its development process and the imbalance of income distribution. Judging from the regional structure of global capital flows, developed countries and regions continue to maintain their position and role in global capital flows, becoming the starting point and end point of capital globalization, especially the capital flows between the United States, Europe and Japan continue to maintain a high level, and the trend of multi-directional capital flows is increasingly obvious. Even if the financial crisis broke out on a large scale, it not only did not affect the activities of developed industrial countries in the international capital market, but promoted the capital to flow into developed countries at a faster speed and on a larger scale. In particular, the United States has become the ultimate destination of global capital flows, and a large number of continuous capital inflows have promoted its super financial strength and its influence on the future pattern of international capital markets.
Financial globalization in the form of free flow of capital and liberalization of financial trade services has promoted the competition in the global financial field, pushed the risk return to the average level, and maintained the balance and stability of the market through the rapid adjustment of asset prices. At the same time, the free flow of capital urges financial intermediaries to conduct better risk assessment and management and expand the scope of technology transfer. Therefore, more financial institutions can provide high-quality and efficient financial services in a wider range and promote the efficiency of financial markets. In addition, the globalization of capital flows requires the relevant administrative authorities of a country to effectively improve the credibility of economic and financial policies and the coordination ability of related policy combinations.
Of course, in the long history of human development, the capital expansion in the process of financial globalization is only the beginning, and the global expansion of capital is still in its infancy. The global financial crisis in the late 1980s began to gradually expose the negative impact of the globalization of financial capital. However, contrary to our traditional understanding, even though the scale of change of different capital flow instruments has fluctuated one after another, on the whole, the trend of continuous growth of global capital flow has not been affected by the financial crisis, and the growth of international financing has become a continuous behavior.