Essay: Benefits of Globalization in Financial Market
What would be some benefits of the globalization in financial market? What are some risks? How could an organization minimize the risk in a global financial market?
Globalization in the financial market has several benefits but is also accompanied by several risks and limitations. Since financial globalization entails integration of a firm’s financial systems to those of the international market, there is liberalization of the domestic capital account and financial sector (Kenen, 2006). This comes due to there is increase in capital movement across countries including lively participation of local lenders and borrowers in the financial market internationally. Since this global financial integration is by both developed and developing countries, the developing countries will benefit from the already developed countries (Schmukler, 2004).
The initial form of financial globalization faced the risk of the WWW I which left every country on its own to regain autonomy of monetary policy. WWW I was followed by an intense depression, instability, and eventually to WWW II disrupting the whole concept of financial globalization. It is therefore true that economic crisis and depressions are the best risks that attack financial globalization.
The weeks learning has been on financial concepts and this has helped me in better understanding all the financial concepts. This will further help me in understanding financial problems and be able to provide solutions to them. By use of existing research findings, one is able to better understand the problem in question.