Question

Looking forward - What should we be thinking about to be better prepared for the next financial crisis? Consider what kinds of actions, education, awareness, accountability, transparency, oversight or regulations should be implemented now. Consider how the following groups (i.e. financial institutions, government, central banks, households, businesses) could better take responsibility in reducing their own risks and/or the overall financial market risks. Finally, when do you think we will we have another financial crisis (i.e. approximate date), and what might cause the crisis?

Answer 1

It's been a decade now from the last financial crisis and now seeing the progress that we have made so far we can say we are safe but not fully. There are many things in many scenarios where we could still do something in order to avoid the next financial crisis.Following are those:-

1) Recovering from and avoiding white Collar crime:- There many persons who have done forgery in finance and are involved in many billion dollar scams. Government should be have a close eye on their activities and in case the scams are highlighted then there should be high rate of recovery

2) Back up plan:- Everyone should take a back up plan where in they should have emergency fund, mutual funds or any retirement fund in order to survive the financial crisis.

3) Awareness regarding Saving:- Proper education should be given right from the childhood to save more

4) Using Debt carefully:- People should be using the debt carefully. They should be taking out only that much amount of debt which they can handle at the time of crisis.

5) Enhance your skills:- If your skills are growing then there will be larger scope for you to earn more. Now a days, many employers provide support to employees through their own education programs wherein the employee has an opportunity to enhance his or her skills set.  

6) Good Financial lifestyle:- People should minimize their monthly expenditure, prepare a budget in the start of every month & should always be looking for extra earnings.

Though learning the lessons from the past we all will be taking steps to avoid but, there are many things that the following groups can do in order to avoid financial crisis:-

Government :- Strong supervisory structure and policies to be implemented by the government. Government should take the steps urgently on seeing the coming financial crisis after the analysis.

Central Banks:- Strong answers to the bankruptcy which do not effect the financial channels which could be done with effective communication channels.

Financial Institutions:- These institutions should monitor their private loans given to the people and avoid lending more or at least have a backup plan for themselves as well.

Households:- People should be investing in mutual funds, retirement funds, planning their budget, limiting their expenditure and save more accordingly.

Business:- People should avoid working on credit. They should also invest in some investment and insurance plans which could also help them in surviving at the times of financial crisis.  

At last, as per the increasing demand of credit cards and expenditure done by the people plus many scams that have come up so far i would say we can see next financial crisis in October 2020 i.e 20th Oct'2020