The construction of financial supervision system under Greek debt crisis Essay

gatewayThe m sensationtary crisis and the Grecian main(a) debt crisis have accelerated the innovation and reflexion of EU monetary supervision scheme. This report is analyzing the cause of classical sovereign debt crisis on the basis of the domestic factors, the international factors and EU factors. Moreover, it illustrates the construction of financial restrictive remains of EU based on the level of big and little. The macro level has a European constitutionic risk council the micro level has a secondary European financial regulative system which is constituted by EU and member c exclusively downs. The EU also has want instrument on the stage, much(prenominal) as, The European financial stabilization mechanism and The European financial stability facility and associated with a series of regulatory measures. The requirement instrument and institutional measures launched by The Greek crisis and the European northward have provided experience and lessons for world wide in response to the global financial crisis around the world.CausesThe Greek saving was one of the fastest growing in the euro zone during the 2000s. The government of Greece run large shortages due to a loyal economy and falling bond yield. Debt to GDP has remained above 100% since the gate of the EURO. The global financial crisis in 2008 admits the Greek economy suffer a severe setback and the global financial crisis reveals its weak financial billet from two aspects. First, the economy structure of Greece is relatively single, which means the growth of its economy is instable. Second, the debt investment strategies of National Bank have produces a great accuse to the Greek economy. However, the global financial crisis moreover pushed the exposing of the financial problem of Greece and the inelegant overspent and failed to tell to the European nitty-gritty the actual size of its ballooning deficit ar the primary cause. Furthermore, the European Union also did not l ook into the figures sent in by Athens properly.Long term solutionsThe Greek sovereign debt crisis stimulated the process of the form of EU financial regulatory system. The explosion of U.S. financial crisis has made Europeans understand that the European financial regulatory did not consist with the market integration process. The crowners of European Union have made earthshaking strategies for ensuring fiscal stability in the dogged term. Currently, in clubhouse to avoid a possible domino take caused by Greek crisis and to avoid a weak euro, the member enjoin of the European Union, on the one hand, require that the Greece itself must cut spending on a wide range, on the other hand, the member state ask to speed the straighten out of EU financial market up and strengthen the financial regulatory system on the level of European Union and its members. In order to plant financial regulatory system and its associated measures, there be three primary aspects to focus on first, the financial regulation of the EU members, strictly control and limit the problem of debt overweight. Second, it is requirement to strengthen financial supervision to disallow the speculation by speculators. Third, it is decisive to solve the institutional structure problem of Euro itself. These three must join forces and communication with apiece other.Financial regulatory institutionIn order to strengthen European financial regulatory reform, the EU commission proposed to establish European Systemic Risk Council on the macro level and European System of Financial Supervision on the micro level. The main responsibilities are establishing regulatory insurance at the macro level and conveying to European regulatory bureau or providing early stage risk exemplar to compare the observation of the development of macro economical and to propose dominant policy in correspond to the change of the supervision. For instance, responsible for collecting analysing financial stability inf ormation, publishing risk warning, to take overall regional action when one country has encountered difficulty and hardly deal with it. It aim to solve a major drawback which is exposed by the financial crisis, the financial system is helpless when the systematic risk is complex, associated and between department and cross department.Emergency system in phaseIn order to solve the Greek crisis, the EU and its members use emergencyrelief instrument to manage debt crisis. The main emergency systems in stage are establishing European Financial Stabilisation apparatus and European Financial Stability Facility. Above all, all the instruments and measures are to ensure that the union is able to deal with the debt crisis and also to ensure such crisis will not happen in the future.My commentsI would like to make a comment on the European problem of the Greek crisis. It seems that the Greek government is unable to deal with its budget and is incapable to reduce macrocosm spending and inc rease tax revenues. Since the introduction of the EURO, the financial situation is turn every year. In my opinion, as Greek crisis has become a European one, i do believe Europe is taking fundamental economic reforms which are necessary to copy with the imbalance of the Greek financial crisis. polishAs mentioned above, the Greek crisis and the institutional measures introduced by the EU have provided significant experience for worldwide in dealing with the global financial crisis. First, all crisis has its latency and incentives, it is important to prevent the source in order to prevent the financial crisis and the sovereign debt crisis. Second, the financial crisis and the sovereign debt crisis have brought an opportunity to the reform of the world monetary system and the financial system, it also a altercate for the leading position of US dollar. From the development of the European integration process, each crisis has pushed the innovation and improvement of the system of EU in the past and lead to European integration ultimately. The development of the European integration could say that is a process of overcoming the crisis constantly and innovation of system continuously.ReferencesAntonis Antoniadis, 2010. Debt Crisis as a international Emergency The European Economic Constitution and Other Greek Fables dingleAriccia, Giovanni & Detragiache, Enrica & Rajan, Raghuram, 2008. The real effect of banking crises, Matthew Lynn, 2010. Bust Greece, the Euro and the Sovereign Debt Crisis Martin Feldstein, 2011. Greek default is just a matter of when, notif. In Financial Times. (24.06.11)