The Eastern Path of Global Finance

Abstract

The article analyzes the competition between the “Anglo-Saxon”, “continental” and “eastern” concentration of power in global finance, demonstrates the strengthening of the eastern vector in the financial development of the world. For this purpose, a comparative analysis of the financial sectors dynamics of dozen countries in the world in 2001-2020 is made. In particular, it shows the “east bias” in the global money supply, monetization, in the internationalization of national currencies, in international settlements, in the stock markets, in cross-border investments. The differences in the level of “bias to the East” for different segments of global finance are revealed. In various dimensions, it is shown to what extent the dominant role of the Anglo-Saxon model in global finance has been preserved and to what extent the “continental model” is being replaced by the Asian one. An answer is given to the question of whether a post-Soviet “core” is being formed in global finance (centered in Russia). The article gives an idea of “financial afterburner” policy of central banks in Asian and other economies, which allows to ensure outstripping financial development while maintaining relatively financial stability and moderate inflation. Using the case of China, it is shown how, with such a policy, the activities of the central bank are associated with the stimulation of rapid and sustainable economic growth (through direct and indirect management of monetary aggregates, credit, interest, and the exchange rate, in conjunction with other types of macroeconomic policies). The author gives recommendations for Russia (its central bank and financial sector) in order to strengthen its position in the financial hierarchy of countries and the ability to compete with other economies in global finance.

Keywords

• asian economies
• global finance
• hierarchy
• the “east bias”
• financial policy
• financial development
• central bank
• economic miracle