Hu Shuli
China's financial authorities got already much advise on how to calm down the overheated stock exchange, but when the chief-editor of the financial magazine Caijing speaks, it is time to listen. She sees basically two ways to deal with the "irrational exuberance", as she rephrases a famous says by Alan Greenspan in 1996.
First, people should not longer be punished for keeping their savings at the bank. With an inflation of 3 percent and an interest rate of 2.4 percent people want to use their money.
Secondly, the government should stop their efforts to educate people but really deal with illegal practises.
Statements such as “there are some cases of illegal operation” in the CSRC notice are too mild. Among those who are active in the market, not a few have problems with conflicts of interest. In some institutions connected with security exchanges, almost everyone trades stocks, and these institutions basically fail to function near the close of a stock-trading day. Trading stocks during working hours has become a “normal” phenomenon. Some relatives of employees of institutional investors even boast publicly about how they make money based on insider information.
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