...et al. 1999).2 Most definitions boil down to the fact that globalisation is both a process of geographical/spatial outreach and of an increased degree of interconnectedness and interdependence between people, groups and institutions based in different countries of the world. As a process of spatial outreach it is not new and has long historical antecedents (Held et al., 1999). Nonetheless it is argued in this chapter that the current process is considerably different from any previous process of outreach. One of the major differences is seen in the role that transnational corporations (TNCs) play in the globalisation process. The chapter proceeds in section 2 with an analysis of the salient characteristics of the globalisation process. The third section considers the role of TNCs in cross-border transactions. Section 4 develops the argument that the TNCs are a dominant cause of the globalisation process. Section 5 considers the wider policy implications of this perspective and the last section concludes. 2. Salient characteristics of globalisation The current globalisation process is characterised by both qualitative and quantitative aspects and it differs from previous outreach processes in many of these aspects. The process is cumulative and thus the various aspects and mechanisms reinforce each other. Among the qualitative aspects of globalisation the following play an important part: l l l l Breadth of change. The changes now involve a variety of fields or ‘domains’...
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...Contents INTRODUCTION 2 So what is financial intermediation? 2 a) The brokerage function: 2 b) The asset transformation function 2 c) The Risk evaluation and management function 3 Why are financial intermediaries important? 3 THEORIES OF FINCANCIAL INTERMEDIATION 3 Informational Asymmetries 3 Transaction Costs Theory 4 Regulation 4 HISTORICAL DEVELOPMENT 5 Origin of Financial Intermediation 5 EVOLUTION OF FINANCIAL INTERMEDIATION 6 THE FUTURE OF FINANCIAL INTERMEDIATION 7 TRENDS IN FUTURE FINANCIAL INTERMEDIATION 8 Regulation (Deregulation) 8 Revised regulatory framework 8 Revised reporting standards and accounting 8 International Monitoring and Oversight 9 Effects on Insurance 9 Technology 9 New financial innovations 9 Globalization 9 Presence 9 Scale 10 Increased Government involvement 10 IMPLICATIONS 11 CONCLUSION 11 BIBLIOGRAPHY 12 FINANCIAL INTERMEDIATION INTRODUCTION Financial Intermediation is a crucial and pervasive feature of all world economies. But as Franklin Allen (2001) observed in his AFA presidential Address, there is a widespread view that financial intermediaries can be ignored because they have no real effect. But this cannot be true, in my opinion, savings-investment process, corporate finance decisions, and consumer portfolio choices cannot be understood without studying financial intermediation. So what is financial intermediation? When talking about financial markets we generally are talking about...
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...The current issue and full text archive of this journal is available at www.emeraldinsight.com/1742-2043.htm CPOIB 5,1/2 Wrong assumptions in the financial crisis Manuel B. Aalbers Amsterdam Institute for Metropolitan and International Development Studies, University of Amsterdam, Amsterdam, The Netherlands Abstract Purpose – The purpose of this paper is to show how some of the assumptions about the current financial crisis are wrong because they misunderstand what takes place in the mortgage market. Design/methodology/approach – The paper discusses four wrong assumptions: one related to regulation, one to leveraging, one to subprime lending and one to predatory lending. It briefly discusses some policy implications. Findings – The role of the state in the mortgage market is more complex than suggested by those who blame the state for not doing anything. The concept of leveraging can explain, at least in part, why the losses in financial markets are bigger than the losses in the housing market. Many subprime loans were sold to prime borrowers. Subprime lending was not designed to increase homeownership rates, but to fuel profits by exploiting vulnerable borrowers. Practical implications – It is too easy to argue that everyone made mistakes; most borrowers cannot be blamed for being sold risky, overpriced loans. A rescue plan is needed for defaulting borrowers and those already in foreclosure. Originality/value – The paper does not present new research, but brings together...
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...economic crisis? Loh Hu 2/18/2013 In this paper, I examine how the theory of technological innovation waves could contribute to solving the ongoing economic crisis. Primarily, my stance remains that innovation in itself is insufficient to solve the economic crisis unless there exists a matching techno-economic paradigm where national, supranational and global efforts are coordinated for a full deployment of technological revolution. Can innovation solve the economic crisis? Background There has been a wide international debate on the causes and possible solutions to the economic crisis that emerged in 2007 – 2008 (Ranga and Etzkowitz 2012). The economic crisis sweeps across the global financial system rapidly and furiously as markets are globally integrated (Gore 2010). Hence, the responses to the global economic crisis are not only enclosed within a nation’s or a coalition government’s approach. Rather, a global coordinated response is warranted as well. Economic stimulus packages addressing short-term and long-term problems have been adopted in most countries as well as the European Commission (Ranga and Etzkowitz 2012). Internationally, the United States of America and European Union have recently been discussing on a free-trade agreement to remove trading barriers between the two important economic powers and boost the economies (BBC News Business 2013). Globally, the G-20 group of major economies have considered proposals on international financial regulation, anti-protectionism...
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...pResented by the society of ActuARies, the cAsuAlty ActuARiAl society And the cAnAdiAn institute of ActuARies Risk Management: The Current Financial Crisis, Lessons Learned and Future Implications Copyright 2008 by the Society of Actuaries. R I s k M a n a g e M e n T: the current financial crisis, lessons learned and future implications introduction the current financial crisis presents a case study of a “financial tsunami” (as former federal Reserve chairman Alan Greenspan recently called it) on what can go wrong. its ramifications are far-reaching and the lessons learned will be embedded in risk management practices for years to come. As one of the premier enterprise risk professions in practice today, the actuarial profession is sharing its substantial insight into what went wrong and the implications for the future. on behalf of the society of Actuaries, the casualty Actuarial society and the canadian institute of Actuaries, we are pleased to provide a series of essays on Risk Management: The Current Financial Crisis, Lessons Learned and Future Implications. this e-book is the result of a call for essays on the subject coordinated by the following groups: • • • • The Joint Risk Management Section of the Society of Actuaries, Casualty Actuarial Society and Canadian institute of Actuaries The Investment Section of the Society of Actuaries International Network of Actuarial Risk Managers Enterprise Risk Management Institute International ...
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... Criticisms on the controversial roles of IMF in East Asia Financial Crisis Introduction Now and then, nation to nation, financial crises are inevitable: Mexico in 1994, the whole East Asia region in 1997, Brazil in 1999, and the most recently Argentina in 2001. Looking back to the victims of such financial crises, we found that most of them are labeled as the developing countries, whose financial sectors were still weak at that time yet were impetuously exposed to the advocated ‘Liberal financial market’ which was supported by the Neoclassical Liberalism social economists. Among all these financial crises, the financial storm in East Asia, starting from the year of 1997, wreaked beyond doubt the greatest havoc on the Asia and the world economy as a whole, dragging down the ‘Asian tigers’ (Thailand, Malaysia, Indonesia, Philippine, Hong Kong, Korea, Taiwan and Singapore) from the peak of the glorious ‘Economic Miracle’ in the past few years. Because of the severity and contagion of the East Asia Crisis, important questions have been raised such as the causes of the crisis, the role of the International Monetary Fund (IMF), and the financial architecture of international capital markets. As one of the most important international organizations, IMF has its great impact on the world economy. In this paper, the influence of IMF before the eruption of the crisis and its role in the recovery of East Asia economy will be presented...
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...Please cite this note as: OECD (2014), “OECD forecasts during and after the financial crisis: A Post Mortem”, OECD Economics Department Policy Notes, No. 23 February 2014. OECD FORECASTS DURING AND AFTER THE FINANCIAL CRISIS: A POST MORTEM OECD Economics Department Policy Note no. 23 February 2014 This Policy Note is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Organisation or of the governments of its member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. © OECD 2014 You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for public or commercial use and translation rights should be submitted...
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...impact the business operations is the difference between business failure and success. To this end, the research established various changes in the business environment that have taken place in political, economic, financial and socio-cultural circles. Political changes especially the Arab spring have had far reaching impact on the airline sector with fall in passenger numbers to these destination as well as the rise in fuel prices negatively impacting the growth of the industry, political instability in other areas as well as laws regulating the airline sector have been on the rise as countries seek to protect local airlines, the economic crisis slowed down the growth of the sector but with the recovery process on track, the airline industry is expected to grow into the foreseeable future, issues such a new taxes for example carbon tax in Europe, the unstable foreign exchange market and inflationary pressures continue to impact the industry growth. Financial changes after the 2008 financial crisis have also affected the sector with stringent borrowing terms imposed as well as regulation on remuneration and benefits schemes for top managers imposed by amendments in the Sarbanes Oxley Act. Looking into the future, the changes witnessed in political/legal, economic, financial and socio-cultural...
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...Origins and Responses to the Crisis Barry Eichengreen University of California, Berkeley October 2008 Nearly two years after the outbreak of the credit crisis (which may be dated to March 2007 when major losses were announced by the U.S. subprime-based investors Accredited Home Lenders Holding and New Century Financial), key issues remain to be resolved. At the most basic level the questions are two. What caused the crisis? And in light of one’s answer to this first question, what should be done to minimize the risk of repetition if not of identical events then at least of something similar? To say that these questions remain to be satisfactorily answered is not the same as saying that there has been a shortage of attempts. Standard operating procedure starts by rounding up the usual suspects: unethical mortgage brokers, greedy bankers, naïve homeowners, and illinformed investors. Lists focusing less on individuals than mechanisms emphasize agency problems between brokers and banks, the originate-and-distribute model, excessive leverage and short-term funding, the perverse incentives created by executive compensation practices, conflicts of interest within the rating agencies, and permissive monetary policies. These long lists of causes lead to correspondingly long lists of reforms: regulate mortgage brokers, rating agencies, and executive compensation; force banks to keep a participation in any securities they originate; require banks to hold more capital; and...
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...Positive and Negative Effects of the Global Financial Crisis Harlita H. Tomlinson Capella University BMGT8114: Accounting in the Global Era Dr. Wendy Achilles June 8,2014 Table of Contents Abstract 3 Positive and Negative Effects of the Global Financial Crisis 4 Background on the Global Financial Crisis 5 Global Financial Crisis and Its Negative Effects 9 Lack of Financial Sector Regulation and Oversights 9 Increase in the Number of Bankruptcies 11 Global Financial Crisis and Its Positive Effects 12 Designing Regulations to Monitor the Financial Sector 12 Global Governance as a Side Effect of the Global Financial Crisis 13 Lessons Learned 16 Domestic Lessons Learned 16 Global Lessons Learned 17 Lessons from Romania. 18 The Role of Financial Executives in GFC 19 Conclusions 21 References 24 Abstract The first financial crisis of the twenty-first century has not yet ended, according to Gorton and Metrick (2012), the wave of research on the crisis has already exceeded any single reader’s capacity, with the pace of new work only making this task harder. The Global Financial Crisis is considered by many economists to be the worst financial crisis since the Great Depression. Global Financial Crisis resulted in the threat of the total collapse of large financial institutions, the bailout of banks by national governments, and market downturns around the world. In the aftermath of this crisis, the housing market declined significantly and has not...
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...profit or loss is possible. 4.stratergic risk: A possible source of loss that might arise from the pursuit of an unsuccessful business plan. For example, strategic risk might arise from making poor business decisions, from the substandard execution of decisions, from inadequate resource allocation, or from a failure to respond well to changes in the business environment. 5.operational risk: Probability of loss occurring from the internal inadequacies of a firm or a breakdown in its controls, operations, or procedures. 6.financial risk: The probability of loss inherent in financing methods which may impair the ability to provide adequate return. 7. Transaction: Assets relocation of mergers and acquisitions, spin-offs, alliances and joint ventures. 8.Investor Relations: Strategy for communicating with individuals who have invested in the business. 9.Compliance Risk (Legal Risk): These are risks associated with the need to comply with the rules and regulations of the government. 10.Other risks: These include crime exposures, Human resource...
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...COLLEGE OF ECONOMIC AND MANAGEMENT SCIENCES DEPARTMENT OF BUSINESS MANAGEMENT An assignment submitted in partial fulfilment of the course: INT4801 (International Business) Assignment 03 Due Date: 09 October 2015 Table of Contents TABLE OF CONTENTS ..................................................................................................................................................... 1 QUESTION 1: CRITICALLY EVALUATE THE IMPORTANCE OF WORLD TRADE ORGANISATION (WTO) AS A REGULATORY BODY IN INTERNATIONAL TRADE ARRANGEMENTS. .................................................. 2 INTRODUCTION ......................................................................................................................................................................... 2 AGREED LIBERALIZATION ............................................................................................................... ERROR! BOOKMARK NOT DEFINED. RULE OF LAW.............................................................................................................................. ERROR! BOOKMARK NOT DEFINED. QUESTION 2: EXTENSIVELY ANALYSE THE RELEVANCE OF SUBSIDY AS AN INSTRUMENTS OF TRADE RESTRICTION, ESPECIALLY IN AGRICULTURE SECTOR. ................................................................... 9 INTRODUCTION ...........................................................................................................................................................
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...THE GLOBAL FINANCIAL CRISIS AND ITS IMPACT ON THE FINANCIAL SECTOR IN JORDAN: APPLIED STUDY ON FINANCIAL COMPANIES LISTED IN AMMAN STOCK EXCHANGE Fayez J.S. Alnajjar, Jadara University, Irbid, Jordan. Mahmood I. Noor, Al-Isra Private University, Amman, Jordan. Nazem M.M. Al-ahmad, Jadara University, Irbid, Jordan. Suzan S. Issa, University of Petra, Amman, Jordan. ABSTRACT The study adopted a comprehensive survey of companies listed on the Amman Stock Exchange, in order to identify the most important effects of the global financial crisis on the financial sector in general, and its constituent sectors particularly in Jordan, Through the movement of the index for each sector of the financial sectors, the study found that Jordan like other countries in the world has been affected by the global financial crisis, but to a lesser extent due to the lack of modern financial instruments in the financial market such as derivatives. The study found also that the financial sectors in Jordan has recorded a sequential decline it was most severe in the diversified financial services sector, followed by the real estate sector and the banking sector varied, then the insurance sector, where it notes that the diversified financial services sector and real estate sector have been a sharp rise at the beginning of 2008 so they are the most affected at the time of the global financial crisis, as shown by the similarity of the study of vulnerability to a large extent. The study also found that the financial...
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...O C C A S I O N A L PA P E R S E R I E S N O 1 2 3 / F E B R UA RY 2 011 THE INTERNATIONAL MONETARY SYSTEM AFTER THE FINANCIAL CRISIS by Ettore Dorrucci and Julie McKay OCCASIONAL PAPER SERIES NO 123 / FEBRUARY 2011 THE INTERNATIONAL MONETARY SYSTEM AFTER THE FINANCIAL CRISIS by Ettore Dorrucci and Julie McKay1 NOTE: This Occasional Paper should not be reported as representing the views of the European Central Bank (ECB). The views expressed are those of the authors and do not necessarily reflect those of the ECB. In 2011 all ECB publications feature a motif taken from the €100 banknote. This paper can be downloaded without charge from http://www.ecb.europa.eu or from the Social Science Research Network electronic library at http://ssrn.com/abstract_id=1646277 1 European Central Bank, Ettore.Dorrucci@ecb.europa.eu, Julie.McKay@ecb.europa.eu. The views expressed in this paper do not necessarily reflect those of the European Central Bank. The authors would like to thank, outside their institution, A. Afota, C. Borio, M. Committeri, B. Eichengreen, A. Erce, A. Gastaud, P. L'Hotelleire-Fallois Armas, P. Moreno, P. Sedlacek, Z. Szalai, I. Visco and J-P. Yanitch, and, within their institution, R. Beck, T. Bracke, A. Chudik, A. Mehl, E. Mileva, F. Moss, G. Pineau, F. Ramon-Ballester, L. Stracca, R. Straub, and C. Thimann for their very helpful comments and/or inputs. © European Central Bank, 2011 Address Kaiserstrasse 29 60311 Frankfurt am Main, Germany...
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...Global Economic Crisis The global financial crisis (GFC) or global economic crisis is commonly believed to have begun in July 2007 with the credit crunch, when a loss of confidence by US investors in the value of sub-prime mortgages caused a liquidity crisis. This, in turn, resulted in the US Federal Bank injecting a large amount of capital into financial markets. By September 2008, the crisis had worsened as stock markets around the globe crashed and became highly volatile. Consumer confidence hit rock bottom as everyone tightened their belts in fear of what could lie ahead. The current financial crisis is the worst the world has seen since the Great Depression of the 1930s. For younger generations, accustomed to mild recessions of the new phase of globalization, the misery of the Great Depression is hitherto nothing more than a distant legend. However, the collapse of two Bear Stearns Hedge funds in summer of 2007 exposed what came to be known as the subprime mortgage crisis, reintroducing the world to an era of bank failures, a credit crunch, private defaults and massive layoffs. In the new, globalized world of closely interdependent economies, the crisis affected almost every part of the world, receiving extensive coverage in the international media. “In an Interconnected World, American Homeowner Woes Can Be Felt from Beijing to Rio de Janeiro,” observed the International Herald Tribune at the onset of the crisis. “Chinese Steelmakers Shiver, Indian Miners Catch Flu,” noted...
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