MONETARY AND BANKING SYSTEMS OF THE CENTRAL EURASIAN COUNTRIES IN THE CONTEXT OF THE WORLD FINANCIAL AND ECONOMIC CRISIS

Eldar ISMAILOV


Eldar Ismailov, Director of the Institute of Strategic Studies of the Caucasus (Baku, Azerbaijan)


Introduction

The financial crisis that has shaken the world dealt a rather hard-felt blow to the economy of the Central Eurasian countries, thus aggravating its weaknesses and ailments. Some countries in this group are keenly feeling the consequences, which are expressed primarily in imbalances in their monetary and banking systems, as well as in decreased trade, tougher conditions for acquiring funds in the world financial market, and so on. The independence of the market economies of the Central European states has made it possible for different scenarios to be enacted for developing and integrating the above-mentioned systems in conditions of financial globalization. Various opinions are being expressed on this account, thus making this a pertinent research topic in the context of the growing dynamism of the processes designed to achieve closer cooperation in the financial and currency spheres.

The World Financial and Economic Crisis and its Manifestation in the Central Eurasian Expanse

Over the course of history, the world economy has periodically undergone financial upheavals. Between 1970 and 2007, IMF experts counted 124 systemic banking, 208 currency, and 63 debt crises accompanied by sovereign debt defaults and affecting many countries. They have been covered in sufficient depth in the economic literature. We will only list a few that have occurred in the past decade and encompassed entire groups of countries. For example, in 1992-1993, several countries of the European Union (Great Britain, Italy, Sweden, Norway, and Finland) experienced currency crises. In the past two years, a severe crisis, which began in Mexico, spread to other countries of Latin America. In 1997-1998, a global financial crisis began in the countries of East (Korea) and Southeast (Malaysia, Thailand, Indonesia, and the Philippines) Asia and later spread to Eastern Europe (Russia and several of the former Soviet republics) and Latin America (Brazil).

The crisis the global financial system is currently experiencing is one of the most serious and widespread of any that have occurred during the past few years. It differs from all the previous ones both in its severity and scope and perhaps for the first time since the Great Depression has encompassed the whole world. The uniqueness of the current financial crisis is manifested in different ways. First, we should stress its global nature: after beginning in the U.S., it spread rather rapidly to most other countries and became a global crisis, which distinguishes it from the above-mentioned crises. It is just as important to single out the scope of..


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