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Former French Prime Minister Dominique de Villepin [Photo: China.org.cn]

No doubt, credit is a key element of economic theory. It is the key to the accumulation of capital in a market economy. Without a credit system, there would be no investment, no creation of jobs and no development of the economy. In one word, it's the key to growth by transferring money from unproductive accumulations to places where it can become productive. Credit is also a key to monetary theory on the circulation of goods. Without lending, money circulation would remain extremely limited and so too would the creation of value.

Today, we live in a dangerously paradoxical world concerning credit. The credit system remains dominated by Western models and rules.

The main investment resources are still managed by the West. Prior to the fall of Lehman Brothers, the five major investment banks were located on Wall Street. Large pension funds and hedge funds are still American. Even venture capital is still mainly based in the United States.

Risk assessment and the credit rating are also controlled by Western-based institutions. The Big Three—Moody's, Standard and Poor's and Fitch—are U.S.-based. Their rating models are thus inspired by American academic models.

Even the currency in which credit is distributed around the world remains controlled by the West, because of the hegemony of the U.S. dollar, which is a major concern for the stability of investments in many countries because of the rapid evolutions of exchange rates in past decades. Since the dollar abandoned the gold standard in 1971, the global currency system has been dominated by instability.

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