STRATEGIES FOR OFFENSE AND DEFENSE IN GLOBAL CAPITAL MARKETS

Abstract

Common vision of warfare is strewn with troop movements, destructive technologies, ruined infrastructure and, naturally, physical violence. What is missing is another side of the story: the use of capital markets, financial instruments and financial institutions to wage a war that is just as violent as the physical one. The difference is the type of violence and the ultimate physical and nonphysical impact. Bloodletting gives way to financial resource destruction and demolishing of infrastructure is substituted by the destruction of assets, markets, institutions, jobs and ultimately individuals. What constitutes offense and defense conditions in global capital markets and what are the respective strategies is the focus of the following article. The article starts with a brief analysis of symptoms of disarray in today’s global capital markets and what constitutes strategies for aggression in those markets. This is followed by an analysis of the defense side of the equation. The articles go further to suggest a conceptual framework for those dynamics. The article is based on contemporary capital market conceptual frameworks as well as case histories of countries as Thailand, Argentina and Russia. The warfare component is drawn from the observed behavior of players within those markets and the ultimate goals and outcomes of this behavior. The article provides a new analytical framework for strategic thinking within global capital markets. The conceptual framework and its operational dimension have an immediate applied use in projecting country position and identifying country aggressive or defensive posture.