Globalization and Internation Financial Crisis Essay

globalisation and Internation Financial Crisis - Essay ExampleThis consolidation of global relationships is at the level ofindividuals,companies,institutionsand countries (Campenhout and Cassimon, 2012).The main causes of the process of globalization are thetechnical progress in the communications and transportation sections, as well as, thepoliticaldecisions onliberalizationofworld trade. The study of International Finance is of particular significance in todays globalized fiscal marketplace. International finance is a branch of international economics and focuses on the monetary side of meat of the internationaleconomy. The subject matter of international finance is useful for students of economics, finance and business studies.It is theorized that increasing globalization has played a role in creation of a wave of international financial crises in contemporary times (Schmukler and Vesperoni, 2006). The study critically evaluates the supposition of globalizations role in interna tional financial crisis and assesses the question whether international financial stability is feasible in an increasingly globalised economy. In addition, the paper critically appraises international financial crisis and ensuing policy responses to maximize economic and welfare consequences. Discussion The mark of change brought about by the globalization of financial systems has been termed as financial globalizationby some(prenominal) researchers. Globalization of financial systems leads to the creation of a regional market integration of external financial backing.According to Mishkin (2009), the financial aspect ofglobalizationhas three dimensions geographical aspect of financial globalization refers to mobility of capital from one outlandish to another, functional aspect of globalization relates tocapital markets which are compartmentalized by means of shifts in money markets and carry markets. Obadan (2006) mentions that under the influence of financial globalization, gl obal financial institutions are created, as well, like theIMF, World shoreand the European Community. Globalizations effect on international financial markets also includes deregulation, abolition of modify controlsand restrictions on capital movements. Globalization also encourages financial innovation, disintermediation and direct access operators to funding without going throughintermediaries (Cline, 2010). The impacts of globalization on the financial systems are dealt under heads Market Development Financial globalization has facilitated the financing of companies and that thebalance of payments. This has eliminated barriers to capital flows and has given an unprecedented boost tofinancial markets worldwide (Rose, Prasad and Terrones, 2009). Today financial culture is processed and disseminated a approximately theworld, which leads to increased speculations in the financial markets and a highvolatilityofcapital round the globe.This provides a flow of investment opportunities based oneconomic factors (Mishkin, 2009). These effects are sometimes seen as uncontrollable by the regional banking systemand theinternational fina