Speaking on Monday in İstanbul at the International Monetary Fund (IMF)/World Bank annual meetings, Soros underlined that an alternative market system, which he termed “state capitalism,” threatened to replace the current global financial mechanism, adding that such a development would not benefit the global markets.
“The establishment of state capitalism will be an unfortunate development for the markets. The current global financial system has seen the end; however, not everybody is aware of this fact.” Soros noted that developed economies intervened to save their banks with government bailouts. "Many people want to remember the crisis as a bad dream; however, they should accept that things in the global financial system will not be the same as before." As for developing countries, Soros said the crisis particularly affected their non-financial sectors, and thus developing countries have a long way to go before being able to restructure their banking systems.
As he stressed the importance of new regulations for global markets before the establishment of a healthy new financial system, Soros noted that implementing regulations globally will be a difficult task since each market has its own priorities and unique structure. “If we fail to implement the necessary regulations in the global financial system, there is only one single alternative, and that is state capitalism. Such a system is already showing itself; however, it should be prevented.”
