The market capitalization of the MSCI World Index has lost about $2-trillion in value in that period, putting the benchmark just about back to early 2012 levels, Mr. Porter added in an interview, noting that while other factors have played into it, concern over Greece was the primary culprit.
"Putting the market cap loss of more than $2-trillion into some perspective, the value of Greece’s nominal GDP was $265-billion (and falling) over the past four quarters, or roughly three Facebooks," he said.
"True, this comparison mixes stocks (equity values) and flows (GDP), but it gives a sense of just how much havoc a grand total of 0.16 per cent of the world’s population can cause for financial markets."
... and there was this, Russia was about 5 times that of Greece in economic terms, does anyone remember much about this now....the world went on...
On 17 August 1998, the Russian government devalued the ruble, defaulted on domestic debt, and declared a moratorium on payment to foreign creditors. On that day the Russian government and the Central Bank of Russia issued a "Joint Statement" announcing, in substance, that:
- the ruble/dollar trading band would expand from 5.3–7.1 RUR/USD to 6.0–9.5 RUR/USD;
- Russia's ruble-denominated debt would be restructured in a manner to be announced at a later date; and, to prevent mass Russian bank default,
- a temporary 90-day moratorium would be imposed on the payment of some bank obligations, including certain debts and forward currency contracts.
On August 17, 1998 in the Joint Statement of the Government of the Russian Federation and the Central Bank of the Russian Federation (CBR) the government declared that the government securities (GKOs and OFZs) with due dates through December 31, 1999, would be rescheduled into new securities. The terms of GKO/OFZ restructuring were also determined in the following acts:
- Decree of the Government of the Russian Federation №1007 of 25 August 1998
- Decree of the President of the Russian Federation №888 of 25 August 1998
- Decree №1787-р of 12 December 1998 on novation of state securities
- Federal Law on Top-Priority Measures in the Field of Budget and Tax Policy
GKO bondholders made few attempts to pursue litigation in domestic courts.
At the same time, in addition to widening the currency band, the authorities also announced that they intended to allow the RUR/USD rate to move more freely within the wider band.
At the time, the Moscow Interbank Currency Exchange (or "MICEX") set a daily "official" exchange rate through a series of iterative auctions based on written bids submitted by buyers and sellers. When the buy and sell prices matched, this "fixed" or "settled" the official MICEX exchange rate, which would then be published by Reuters. The MICEX rate was (and is) commonly used by banks and currency dealers worldwide as the reference exchange rate for transactions involving the Russian ruble and foreign currencies.
From 17 to 25 August 1998, the ruble steadily depreciated on the MICEX, moving from 6.43 to 7.86 RUR/USD. On 26 August 1998, the Central Bank terminated ruble-dollar trading on the MICEX, and the MICEX did not fix a ruble-dollar rate that day.
On 2 September 1998 the Central Bank of the Russian Federation decided to abandon the "floating peg" policy and float the ruble freely. By 21 September 1998 the exchange rate had reached 21 rubles to the US dollar, meaning it had lost two thirds of its value of less than a month earlier.
On 28 September 1998 Boris Fyodorov was discharged from the position of the Head of the State Tax Service.