Dubai debt crisis sounds new alarm for tightening risk management

BEIJING, Nov. 29 (Xinhua) -- Global investors are now on pins and needles again after the breakout of the Dubai debt crisis, even though their confidence is being restored with the gradual recovery of the world's ailing economy.

Dubai World, one of Dubai's largest and most important conglomerates, on Wednesday asked for a delay in repaying some of the 60 billion U.S. dollars it owes to creditors, causing panic and concerns across the world.

A year ago, the collapse of Lehman Brothers led to a financial crisis on the global scale, leaving the world with painful lessons to learn about the importance of risk management.

The latest Dubai crisis, which took place in the commercial, trading and financial center of the Gulf area, once again highlighted the urgency of crisis-combating and the all-along importance of risk regulation in global economic decisions.

Debt financing is a key pattern of financial leverage in modern economic operations. In the mean time, the judgement and measurement of risks are pivotal to determining the ratio of a leverage. A high leverage ratio may help augment profits under favorable market conditions, while it can also be destructive in an adverse economic environment. Via:

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