Roger Altman, Evercore Partners Founder and CEO: The Entire Structure of Western Finance Will Change Over Time
Long-term Implications of the Current Financial Crisis
Atakan Hilal (NF), Contributing Writer
Issue date: 11/3/08 Section: News
Yet another effect of the mortgage crisis would be a weakened US Dollar in the long run. According to Mr. Altman, the current strength of the US Dollar will diminish over a period of 1.5 years and in the long-term the US Dollar will lose its unique reserve status with the emergence of other reserve currencies.
Finally, Mr. Roger Altman explained that the entire structure of "Western Finance" would change over time. Currently the financial institutions are "de-leveraging" themselves and are shrinking as a result of new regulations. Conservatism is sure to follow with an unwillingness "to be the person who approved a failed commitment." The motto now is "don't lend to anybody!" As a result of this conservatism, fewer players will be left in the market, who will become the dominant players in the face of reduced competition. A "wholesale" model of finance, where liabilities have been rolled over and over again in capital markets, will transform into a "deposit-based" system.
Mr. Altman concluded that US will lose its place as the finance source of the world due to its weakened economy. Even though the financial markets will slowly recover, the days of "unipolarity" are over.
Finally, Mr. Roger Altman explained that the entire structure of "Western Finance" would change over time. Currently the financial institutions are "de-leveraging" themselves and are shrinking as a result of new regulations. Conservatism is sure to follow with an unwillingness "to be the person who approved a failed commitment." The motto now is "don't lend to anybody!" As a result of this conservatism, fewer players will be left in the market, who will become the dominant players in the face of reduced competition. A "wholesale" model of finance, where liabilities have been rolled over and over again in capital markets, will transform into a "deposit-based" system.
Mr. Altman concluded that US will lose its place as the finance source of the world due to its weakened economy. Even though the financial markets will slowly recover, the days of "unipolarity" are over.
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