Martin's Metrics

A smorgasbord of datapoints from Martin Wolf's Fixing Global Finance. None of these is new, nor original with Martin, but they're bracing and elegantly set forth:

• "In 2001 the World Bank estimated that there had been 112 systematic banking crises in 93 counties between the late 1970S and the end of the 20th Century. ... The age of financial liberalization was, in short, an age of crises." (31)

• "...in the late 1990s two-thirds of all developing countries had bnking seectors with assets of $10 billion or less, and a third had banking sectors with assets of less than $1 billion. Yet in 2000 the world's fiftieth largest bank had assets of $83 billion" (World Bank again) (23). Can you say "Reykjavik"?

• China had (as of 2006) an "unbelievable" savings rate--59 percent of GDP--"must be the highest in any economy ever." That includes private and corporate savings, and yields "a huge excess of savings over investment." Chinese state enterprises save because the government orders them to do so: "the corporate sector has become profitable by disposing of surplus workers, yet the government has not taken some of the increased profits as dividends on the assets it owns, even to finance a safety net for displaced workers. Remarkably (and shockingly), the government has leftg money with enterprise insiders. But the government itself is also a large saver. China has about 800 million poor people, yet the country now consumes less than half of GDP and exports capital to the rest of the world." (69)

• The United States S&L crisis cost the country about 3 percent of GDP. On the other hand, crises in Indonesia (1997-) and Argentina (1980-82) cost about 55 percent of GDP (33-4)