We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

Global Financialization - Essay Example

Comments (0)
The author discusses the financial globalization which has led to regular crises of exchange rates because of volatile flows of capital. Global financialization causes movements of exchange rates to be determined by the flow of capital, instead of current account positions…
Download full paper
Global Financialization
Read TextPreview

Extract of sample
Global Financialization

Download file to see previous pages... In fact, massive inflows of capital followed by sharp and sudden reversals of capital flow result in crises of exchange rates that have characterized developing and emerging nations (Stiglitz 1081). The macroeconomic troubles stirred by volatile flows of capital have been acutely felt in developing and emerging countries such as Turkey and Argentina in 2001 and the late 90s South East Asia financial crisis, which were all related to flow of capital. These countries suffered from sharp declines in real GDP. A particular reason that leads to rates of exchange having such a significant effect is because, in liberalization and financialization of global markets, it is profitable to be involved in interest arbitrage, which means that one borrows from a specific currency and lends or invests in other currencies, also referred to as carrying trade (Rodrik 1). For example, if interest rates of the Turkish Lira were higher compared to those of the Euro, taking rates of exchange to be stable, it tempts to borrow in Euro credit and then invest or even lend in Turkish Lira. This implies that liabilities, as well as assets, will be in currencies of different countries. Therefore, abrupt realignments in rates of exchange could end up having disastrous effects on the balance sheets of banks or organizations. In addition, capital flow liberalization also lets developing nations accrue current account deficits for a longer time, and at a higher level than they could be during the reign of the Bretton Woods organizations. Financial globalization and liberalization have led to an increase of potential difference in development among countries if the global market financial markets retain their stability and calmness. The revaluation, typically, of financial markets has been accompanied by abrupt reversals of capital flow, as well as crises in exchange rates, all of which show that global financialization is not good for developing countries (Rodrik 1). Governments play a crucial role in the evolution of global financialization, as well as its effects on individual countries and their development. All governments at national level possess a specific responsibility to ensure security and stability of the domestic financial, banking, and monetary systems, which are vital to any economy’s functions. The vulnerable nature of financial and banking systems to crises, failure of markets and instability has virtually produced regulatory authorities and central banks that are aimed at protecting their social interests, as well as for the mediation of their countries’ interactions with international financial markets (Doyran 32). Effective stability and functioning of the financial and monetary systems have become a fundamental requirement as far as development is concerned, which is only achievable via the effective actions of nations. ...Download file to see next pagesRead More
Comments (0)
Click to create a comment or rate a document
Global Marketing
The essay defines global marketing, explores its evolution from international marketing before differentiating between the characteristics or determinants of global and international marketing strategies. The different global marketing strategies based on the various determinants also will be studied.
10 Pages(2500 words)Essay
Global warming
According to the research findings alternative energy sources are being developed and researched upon to reduce dependence on fossil fuel as primary source of energy to power up our societies. Recyclable materials are used more and more in industrial products. Trends are shifting towards efficient cars and transport systems.
12 Pages(3000 words)Research Paper
Strategic Management essay
Moreover, the question whether the financialization process, which has been promoted worldwide more than a decade, has been related to the above crisis has not been avoided. In fact, there are many indications that the specific process had a major role of the financial crisis of 2007-2010.
8 Pages(2000 words)Essay
Selling City Futures:The Financialization of Urban Redevelopment Policy
Weber thinks that financial markets have played a big role in the local governments but it is not given great importance or attention by a lot of scholars. She introduces her assumptions about financial integration and pays attention to the three important aspects of urban governance.
3 Pages(750 words)Research Paper
Treasury, Foreign Exchange and Financialization
6 Pages(1500 words)Essay
Global Justice & Global Poverty
It is unfortunate that these inequalities are more than the estate was about 50 years ago. It is unfortunate that from the many that with the changes taking place in the world today, there are higher cases of inequalities than in the previous years (Schaefer 2007, p23).
6 Pages(1500 words)Essay
Global Economy
The discussion reveals that rapid growth and economic convergence are not what globalisation has trailed even then and that of the current time. Rather, Nayyar argues that the gap between the industrialised and developing nations widened through the globalisation trend with growth slowing down and income levels diverging.
18 Pages(4500 words)Book Report/Review
Global companies, global integrity
With this come a number of troubles that were relatively uncommon from previous encounters. Yet, companies are to be more responsive to the changing needs that
1 Pages(250 words)Essay
Global Issues- Global Revolution
I work in the local textile industry which employs the majority of the people in this neighborhood. The pay is barely sufficient to cater for all our needs. Nevertheless, I sometimes go to work with my two sons even though the factory pays them half of what
1 Pages(250 words)Essay
Global aviation/global market
These systems have rendered the sector to operate in unfavorable conditions ranging from climatic and mechanical error detection. Harsh climatic conditions for a long time have been an impediment in the sector, but with the thwarting of the conditions
3 Pages(750 words)Book Report/Review
Let us find you another Essay on topic Global Financialization for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us