International Financial Institutions

1391 Words Feb 2nd, 2018 6 Pages
International trade has had a profound impact on global wealth while also increasing the quality of life for societies around the world. Banking, and in particular, international banking facilities the exchange of capital to areas of the world that need it. These inflows of capital help to foster ingenuity, creativity, and innovation to help spur international growth. As such, each year, globalization plays a more profound role in regards to the national economies of the world. Globalization has allowed for the expansion of corporate operations beyond their natural domestic boundaries. As such it has contributed to an increased standard of living for those who embrace its presence and are therefore willing to take risks (Stiglitz, 2007).

Free trade therefore, is a welcomed addition within the overarching trend of globalization. International financial institutions, both directly and indirectly facilitate free trade among international countries. Free trade allows for the transfer of goods and services when demanded by specific economies. This is much like the exchange of capital needed to help individual companies to grow. It also allows the countries best suited for such activities to flourish. For example, China is proficient in manufacturing which allows the country to export far more goods than it imports. This is partly due to free trade and international…
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