THE PROSPECTS OF CAPITAL MARKET DEVELOPMENT TEN YEARS AFTER THE GLOBAL FINANCIAL CRISIS

U radu je razmatrana perspektiva razvoja globalnog tržišta kapitala na kraju 2018. godine, odnosno deset godina nakon nastanka globalne finansijske krize. Imajući u vidu da SAD i Kina predstavljaju najveće svetske ekonomije, sa zajedničkim učešćem u globalnom bruto domaćem proizvodu od približno 40%, fokus istraživanja je usmeren na ove dve velike i sistemski važne zemlje. Takođe, u radu je ukazano na najvažnije makroekonomske probleme koji su se znatno uvećali u posmatranom desetogodišnjem periodu. Finansijske poteškoće sa kojima se suočavaju vodeće ekonomije sveta u značajnoj meri ograničavaju sposobnost intervenisanja i pružanja pomoći u slučaju pojave novih potresa na globalnom finansijskom tržištu.


Introduction
The global financial crisis started in the autumn of 2008 as a result of the long-standing accumulation of imbalances at the international level. The crisis originated in the United States, as the largest financial market in the world, and then quickly spread to other countries, triggering shocks in the global banking system and the international capital market. The presence of large and until then undetected systemic risk became evident, which was underestimated and insufficiently assessed for a long period of time.
Concerns about systemic risk led the central banks and governments to provide significant financial assistance to vulnerable financial institutions. Financial institutions that were considered extremely large and of great public importance (too big to fail) essentially received the money from taxpayers. In response to the crisis, an expansionary monetary policy was implemented, and large amounts of money with low interest rates were channeled to insolvent banks and other financial institutions. However, despite the assistance and measures taken by central banks, many economies have suffered significant and long-term losses. In the world's largest economies, the global financial crisis has generated numerous adverse consequences, the most significant of which are the decline in economic activity, the rise in unemployment, the decline in exports, the decline in liquidity and the increase in public and private debt. In a large number of countries, the global financial crisis has led to the budget deficit increase. The increase in the budget deficit resulted from the reduction of public revenues caused by the decline in economic activity and the increase of public expenditures due to the rise of costs related to easing the effects of the crisis. In order to prevent a deeper economic crisis, many countries have provided financial assistance to companies through tax relieves and tax cuts, which have stimulated aggregate demand. The undertaken anti-crisis and stimulative measures resulted in a significant increase in public debt in many countries. The problem of rising public debt is also present in the world's major economies, that is, in the United States and China.

Analysis of the Negative Effects of the Global Financial Crisis on the United States
After the stock market crash in 2008, the value of stocks on the world's leading stock exchanges began to grow again. The S&P 500 Index has started to report a rising trend since 9 March 2009. As a result of the high growth, Apple market capitalization in early August 2018 amounted to more than USD 1 trillion. This is the first company whose market capitalization reached USD 1 trillion. A month later, Amazon market capitalization also reached this threshold. The growth of the market capitalization of these companies in the ten-year period following the onset of the global financial crisis is shown in Figure 1.
At the end of 2008, the total market capitalization of Apple and Amazon was just over USD 100 billion. However, since that period, the value of stocks of these companies has grown rapidly, resulting in the combined market capitalization of these companies in the second half of 2018     amounting to approximately USD 2 trillion. In addition to these two largest technology companies in the United States, other companies in this sector achieved significant growth in their value. However, at the end of 2018, a slower growth and even a decline in their value was evident. Figure 2 shows the value movements of the Technology Select Sector SPDR ETF, that is, the exchange-traded fund that replicates the price and yield performance of companies from the technology sector included in the S&P500 index.
In the period after the global financial crisis SPDR ETF has recorded a significant growth. It is important to note that in October 2018 the stock value of SPDR ETF was about the same level as in 2000. This comparison can be significant considering that in 2000 a dot.com crisis occured that was caused by the actions of companies from the technology sector. Also, in mid-December 2018, more than half of the stocks that constitute S&P 500 were in the "bear market" (a 20% drop in the price over the past 52 weeks). However, the most important US stock indices only suffered a correction (a decline by over 10% compared to the highest value over the past 52 weeks) (Marmor Shaw, 2018). In addition to the impeding upward trend of the stock market at the end of 2018, the United States have been facing a number of macroeconomic problems that, along with the above-mentioned pessimism, may be causing new disruptions in the global financial market. This country faces the problem of rising debt, as well as the increasing budget and trade deficit.
After the global financial crisis in the United States, a significant increase of non-financial corporate debt was reported, which is currently approaching the level of 75% of GDP ( Figure 3).
The average level of of nonfinancial corporate debt in the United States in the period 2000-2008 was 64.8% of GDP, while its average value in the period 2008-2018 was 69.3% of GDP. In this regard, since 2008, the corporate credit-rating in the United States has downgraded (for both financial and non-financial companies). Also, the public debt in United States has been continuously increasing (Figure 4).  In addition to the budget deficit, the United States also recorded a growth in the trade deficit ( Figure 6).
In October 2018, the US trade deficit amounted to USD 55.5 billion, which is the highest level in the last ten years. In the first ten months of 2018, the total US trade deficit amounted to USD 503 billion, which is significantly higher than in the same period of the previous year when it amounted to USD 451 billion. This deficit is largely the consequence of the unfavorable relation between import and export of goods, while there is a surplus in the service sector. The

The Impact of the Global Financial Crisis on Chinese Economy
At the beginning of the fourth quarter of 2008, the Chinese economy, as a result of a sudden drop in exports to the United States and the European Union, suffered a sharp decline in gross domestic product. The GDP growth rate fell from 11.5% in the fourth quarter of 2007 to 6.6% in the fourth quarter of 2008. To China, as a country in the development phase and undergoing rapid economic and social transformation, achieving sustainable economic growth is the key to creating jobs and maintaining social stability (Zheng & Tong, 2010). In November 2008, the Chinese authorities quickly responded to the crisis by a series of comprehensive measures. The measures were aimed at stimulating domestic demand, both in terms of consumption and investment, and the assistance to companies engaged in export (Zheng & Tong, 2010). From 2008 to 2013, the overall outstanding public debt rose from 125% to 240% of GDP. A large part of this debt resulted from local government borrowing. Local governments created financial instruments for special purposes (e.g. investments in infrastructure projects) and borrowed from non-banking financial institutions (Viral, 2016: 49). During the 2008 financial crisis, the Chinese authorities ordered local governments to build roads, bridges and finance other public works to foster economy and employment. Such a policy has contributed to dominating investments in the structure of aggregate demand ( Figure 8).
Pored uočenih problema rastuće zaduženosti, u svetu je sve više prisutan i problem nejednake raspodele dohotka. Vrednost Gini indeksa u Between 2004 and 2008, China's total public debt ranged between 170 and 180% of GDP. However, after the onset of the global financial crisis, a significant increase has occured. During 2017, China's total debt increased by 14% compared to 2016 and reached a level of 266% of GDP. At the end of 2018, China's public and private debt amounted to USD 34 trillion, which is approximately three times the country's GDP (Curran, E., 2018). In the overall debt structure of China, the largest increase was recorded by non-financial companies ( Figure 10).
In the aftermath of the global financial crisis, the non-financial corporate debt recorded significant growth, and at the end of 2018, it was above the level of 150% of China's GDP. In the structure of total debt, the private debt accounts for more than half the total debt of China. A significant rise in the non-financial corporate debt creates increasing repayment problems. Only in November 2018, due to the impossibility of settling bond obligations, bankruptcy was reported by five companies, more than in the last four years together (Bloomberg, 2018).

Analysis of the Global Debt, Economic Growth and the Stock Market
The increase in debt levels is present in a large number of countries around the world. In addition to low-income countries in Sub-Saharan Africa and many developing countries, developed countries are increasingly facing this problem. The total debt at the global level is shown in Figure 11.
At the time of Lehman Brothers bankruptcy the overall global debt amounted to USD 173 trillion. In the ten-year period following the collapse of this institution, global debt grew to USD 250 trillion, representing approximately 315% of global GDP. In the structure of global debt, public debt increased by USD 30 trillion in this period, the debt of financial companies by USD 3 trillion, and non-financial corporate debt by USD 28 trillion (Chappatta, 2019). The global debt of the non-financial sector at the end of 2018 amounted to the unprecedented USD 184 trillion or about USD 86,000 per capita, representing twice the average level of income per capita (Dmitrieva, Bloomberg, 2018).
The previous analysis indicates that the United States and China, as the world's largest economies, predomnantly affect the global debt increase. However, it should be noted that Japan, as the world's third largest economy, is heavily burdened with the level of public debt, which at the end of 2018 amounted to 236% of GDP. To finance the substantial debt, the Japanese government has issued bonds bought by the central bank of Japan and other institutional investors (East Asia Forum). These bonds pay low coupon rates, so it can be said that Japan can easily service its debt. In addition to the high level   In addition to the problems of growing indebtedness, the problem of unequal distribution of global income is also evident. The Gini index in the United States, China, India and Indonesia in 2015 is at a higher level than in 1990 (World Economic Forum, 2018). Bearing in mind that these four countries account for approximately 45% of the world's total population, this figure may indicate the problem of rising inequalities in the distribution of income in the world. Also, in the Scandinavian countries, which are otherwise characterized by low Gini index levels, there has been an increase in the observed period. Globally, the largest inequality in the distribution of income is present in South Africa and some countries of Latin America (Mexico and Brazil). Apart from the mentioned problems, almost all countries also face a low GDP growth rate ( Figure 12).
In the period after the global financial crisis the advanced economies achieved lower growth rates than in the period prior to the crisis. China has also been recording lower growth rates, but they are still at the higher levels than in developing economies and advanced economies. According to the IMF's assessment, similar developments should be expected in the future period, which will accelerate the convergence of China and developing countries in this regard, and consequently, further reduce the global GDP growth rate. At the end of 2017, global GDP amounted to USD 80.6 trillion. The United States accounts for 24.4%, while China has a share of 15.4%. In addition to these two leading economies, Japan (6.13%), Germany (4.63%), Great Britain (3.3%), India (3.27%) and France (3.25%) account for a significant share. The share of other countries in global GDP is below 3% (World Bank, GDP).
In addition to the data on the amount of debt and economic growth rates, for the purpose of this analysis, it is necessary to observe the current trends on the most important stock exchanges.
The most important global stock exchange indices in the period 2014-2018 are shown in Figure 13.

Conclusion
The economic measures taken to address the global financial crisis have caused the significant debt increase in a large number of countries. In the fourth quarter of 2008, the global debt amounted to about USD 173 trillion, and at the end of 2018, the debt amounted to approximately USD 250 trillion or 315% of global GDP. In the observed ten-year period, the global public debt increased by about USD 30 trillion, while the non-financial corporate debt rose by over USD 28 trillion. The total nonfinancial corporate debt at the end of 2018 amounted to approximately USD 184 trillion, or about 86,000 per capita, which is twice the amount of disposable income per capita. The US public debt doubled in the ten-year period following the global financial crisis, and at the beginning of 2019 it amounted to about USD 22 trillion. A significant increase of the US public debt was accompanied by an increase in private debt, especially non-financial corporate debt, which at the end of 2018 exceeded 70% of GDP. In addition to the high level of indebtedness, the US faces large budget and trade deficits that are at significantly higher levels than before 2008. These data indicate that in the event of a new financial crisis, the United States would have incomparably less funds available when implementing the necessary anti-crisis measures.
Stojković D., Luković S. The Prospects of Capital Market Development Ten Years After the Global Financial Crisis financial crisis has increased significantly and approached the level of indebtedness of developed countries. At the end of 2018, China's total (public and private) debt amounted to USD 34 trillion, which is about 300% of GDP. In the structure of total debt, more than half of it is accounted for by the non-financial corporate debt. It can be concluded that in the case of a new financial market crisis, China would have incomparably less financial resources available than it was the case when implementing anticrisis measures in resolving the 2008 crisis. In addition to the United States and China, the problem of increased debt is also present in other countries of the world. However, the economies and financial systems of these countries are not large enough to provoke global financial shocks.
Unlike the rising debt, low economic growth rates present a global issue. After exiting the recession, the developed countries have achieved low GDP growth rates. China faces a decreasing rate of economic growth, but it is still above the growth rate of developed and emerging countries. Based on the observed unfavorable macroeconomic trends, it can be assumed that the real causes of the global financial crisis have not been eliminated. A long-term crisis recovery requires the stabilization of the financial system as a whole, but also the creation of a framework for the accelerated economic growth through investment in infrastructure and human resources. In the ten-year period since the global financial crisis, financial regulatory frameworks have improved, but, on the other hand, the short-term and medium-term risks to global financial stability have increased. It is noticeable that new critical points have emerged which could endanger the global financial system in the future. The accumulation of critical points directs economic policy makers to make greater efforts to improve the resilience of the financial system. In the future, countries that are burdened with a high level of public debt should improve the debt sustainability and those with a high or growing leverage of the non-financial sector should mitigate the current critical points through a combination of macroeconomic and prudential policies. Also, global coordination of these policies is very important for the preservation of the global financial stability. The current business environment is marked by a rapid development of financial technologies. Hence, the risks related to financial data security are increasing. These risks should serve as a reminder that the financial system is evolving and that regulators and supervisors have to be cautious about this evolution and be ready to react.
The observed unfavorable systemic factors on the global level were in 2018 followed by a slowdown in the stock market growth. The previous financial crises have confirmed several times that after a period of high liquidity and high asset prices, financial market participants enter the state of irrational euphoria, followed by the asset bubble burst. In this regard, at the end of 2018 the most important stock market indices in the United States finished the longrunning upward trend since March 2009, which could be the announcement of a new crisis in the global capital market.