“the Rapid Expansion of International Financial Market Since Early 1980s Have Integrated the World Economy”. Discuss.

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The United States has some of the largest financial markets worldwide (Commerce.gov, n.d.). These financial services, aid, in the financing of manufactured goods and agricultural products which are exported (Commerce.gov, n.d.). There are several advantages for investment in the financial services of the United States (Commerce.gov, n.d.).

The United States has some of the largest financial markets worldwide (Commerce.gov, n.d.). These financial services aid in the financing of manufactured goods and agricultural products which are exported (Commerce.gov, n.d.). There are several advantages for investment in the financial services of the United States (Commerce.gov, n.d.).

The expansion of new markets – foreign exchange and capital markets are linked globally. They operate 24 hours a day with dealings any where in the world possible in real time. Financial deregulation and the floating of the Australian dollar since 1983 intensified the impact of globalisation on the Australian economy.

After World War II, the Bretton Woods Agreement established the gold standard and two support institutions called the International Monetary Fund (IMF) and the World Bank. This would lead to a shift, away from the gold standard, to more relaxed systems. The idea of currency purely backed by gold was slowly being shifted to a trust based currency. These institutions purpose was to regulate the economies by injecting or taking money in a process called sterilization. Sterilization is to protect certain countries from a going bankrupt. If a country goes bankrupt, it chain a chain reaction of bankruptcies. So, in order to maintain balance, currencies need to be stable enough, so that it can be in debt without having to declare bankruptcy. The idea is

Financial - emergence of worldwide financial markets and better access to external financing for borrowers. By early 21st century it was possible to trade more than $1.5 trillion in national currencies on a daily basis due to expansion in trade and investment.. the rapid growth of these worldwide structures led to increased instability of financial structure globally (Greenspan, 2009). The following economic conditions of globalization aids successful business.

At the end of World War Two, the Bretton Woods system was established for world currencies. This system involved countries fixing their currencies to the US Dollar, which in turn was tied to the value of gold at a fixed exchange rate of $35 per ounce. As this was a fixed exchange rate system it effectively forced countries to pursue a certain monetary policy, in order to keep their currency pegged to the Dollar and in turn the value of gold.

Kvint (2008) indicates that some statistics of reports on emerging market are contradictory, and this inconsistent situation even can be seen from IMF’s reports. For instance, some emerging countries like China and India are classified as emerging markets and are included in the category of developing countries. On the other hand, many of the sub-Saharan countries as emerging markets are definitely still undeveloped. Kvint (2008) suggests that the main and most important characteristic of all emerging market countries is that they are at some stage during the processes of economic maturation and development of free markets. An attractive environment for foreign investors and global trading has been created based on this characteristic. He suggests the main characteristics in his study:

The main concept of the article is to explain why the New International Financial Architecture (NIFA) was created and who is being benefited from this approach. The discussion begins with an examination of the power structures of the global political economy by focusing on the continued dominance of the USA. The article presents the contradictory relations between USA and global finance will be explored so as to shed more critical light on the NIFA. This article critically examines the NIFA by linking its institutional components to the larger contradictions of the capitalist inter-state system. A contradiction is the constant promotion of financial liberalization in emerging

In the following analysis, we will show four aspects of the 2010 international macro financial markets from the international monetary market, international debt market, international stock market and international private equity market.

The BRIC forms an important economic bloc in the global financial market and it is important to understand the impact of the stock index. The Brazil Russia, India and china represents almost a substantial percentage of the world economy and with a total population of about 40 percent. In addition more than 20 percent of the world’s gross domestic product arises from this four economic bloc countries and it is expected to rise over in future. It is also known to be a sheer potential in the coming years. It is also foreseen by the UN report on development and sustenance as it is expected that china is likely to outshine the US economy by 2020 and the BRIC will be one of the G7 by 2032 according to Goldman Sach, 2017. The recent financial simmer evident indicates that these economies were robust to changes in the economic shocks witnessed between 2000-2010. According to Goldman Sach, 2017 the report indicates that the contribution of the BRIC to the economy the growth rate in 2007 was approximately over 40% and the growth rate extended to another economy (Aggarwal, Inclan,

As contemporary literature has shown, since the 1980s the world has experienced a strong wave of financial integration, which – through capital-market liberalization – seems to have played a vital role in facilitating economic growth, in opening up national capital accounts and in boosting the cross-border movements of goods, services, technology, labour and capital (Elson, 2011; Caprio et al., 2012).

The formation of the EEA, however, was not the first attempt by societies to converge their interests under a common economic policy. Its predecessor, the Bretton Woods system that was formatted in 1944, endeavoured to set up a set of rules that would define the monetary relationships between a number of countries. Its primary feature was the commitment by the member nations to maintain a relatively fixed exchange rate against the dollar, which was tied to gold at a fixed rate.

International currency basically means the currency that is used and held beyond the borders of the issuing country, not merely for transactions with that country’s residents but also, and importantly, for transactions between nonresidents (Kenen 2009). For a country that have an international currency, it would meet various benefits and costs which could be analyzed from both economic and political dimensions.

Only once as an independent nation India had choice of a exchange rate being defined as Indian rupee with reference to its foreign country trade partners. After successful independence and followed by constitution of India effect from 26th January 1950, India followed an exchange rate system which Indian Rupee linked to the British Pound Sterling. This system of exchange rate regime continues until mid- 1970’s, this period characterise by the breakdown of Bretton wood Exchange system around the world. In 1975 the system of Indian Rupee ties with Pound-sterling were broken and India started a managed or controlled floating exchange rate regime with which Indian Rupee linked to a number of currencies(‘basket currencies) of India’s major trading partners.