What are the risks of integrated and largely unregulated capital markets for the global economy and...

What are the risks of integrated and largely unregulated capital markets for the global economy and ordinary people living around the world?

Solutions

Expert Solution

The risks of the integrated and largely unregulated capital markets for the global economy and ordinary people living around the world are:

i. Since the economies are interconnected in the era of globalisation, the capital market crisis in one part of the economy can spread around the world very quickly. The example is the financial crash of 2008.

ii. The unregulared markets are more prone to formation of bubbles and when the bubbles burst, the effects are not good for the economy. The markets crash, the incomes dwindle and economy sets on the path of recession.

iii. The unregulated capital markets can also affect the exchange rates between countries tgrough the unregulated movement of the capital. This can be bad for the economy whose currency keeps depriciating due to this.

iv. Unregulated capital markets can lead to accumulation of unproductive investment which will not lead to any real production of goods and services in the economy and will be friutful in the long run.

Rahul Sunny answered 3 months ago

Next > < Previous

Related Solutions

5) A.There are potential benefits and risks from raising capital on global markets. Discuss the pros...

5) A.There are potential benefits and risks from raising capital on global markets. Discuss the pros and cons in terms of risk of raising capital on global markets. B. List and describe three differences and advantages of Global Registered Shares (GRS) over American Depositary Receipts (ADRs).

“The growth of the global economy and individual nation’s economies is dependent upon FDI largely by...

“The growth of the global economy and individual nation’s economies is dependent upon FDI largely by MNEs. Regarding the nation that you are investigating this semester, analyze this nation’s business-friendly and/or prohibiting policies and that position’s influence over FDI for the last 5 years. Do you think they are successfully drawing the right kind of investment that makes the country more sustainable? Explain. the nation is Portugal

Summarize the most important benefits and risks associated with diversification into global markets.

case study apple iPhone. There are risks and rewards for all in a global economy. The...

case study apple iPhone. There are risks and rewards for all in a global economy. The globalization of human capital results in a range of winners and losers around the world: companies and their stockholders, consumers, contractors, firms up and down the supply chain, employed people, and unemployed people, as well as their economies. In February 2011, President Obama asked Apple's Steve Jobs why Apple could not bring back all the jobs it used to provide in the United States....

PLZ Explain (around 400ish words) Gestational surrogacy and (paid) egg donation are largely unregulated in the...

PLZ Explain (around 400ish words) Gestational surrogacy and (paid) egg donation are largely unregulated in the United States. Briefly review why this is the case, and what consequences this has had where questions of parental identity, rights, and responsibilities have arisen in relation to IVF. Then offer a set of well-justified recommendations for policy reforms around these practices. First explain what (if anything) should have been done differently in the late 1970s, and then explain what reforms should be made...

What are the emerging markets? Give examples of emerging markets. What are new global challengers? What...

What are the emerging markets? Give examples of emerging markets. What are new global challengers? What advantages do they typically possess? Do new global challengers pose any threat to firms from advanced economies? Explain. What makes emerging markets attractive for international business? What can businesses do to support the development of poor countries such as Africa?

While your country has an open capital account, your financial markets remain imperfectly integrated with those...

While your country has an open capital account, your financial markets remain imperfectly integrated with those of the rest of the world. The central bank in your country targets the stock of domestic credit. One day, an IMF team arrives and convinces the Finance Minister that your country’s fiscal deficit is excessive. The Finance Minister persuades the parliament to pass a tax increase to reduce the deficit. Explain what effect you would expect this measure to have on: The aggregate...

1 The depth and liquidity of the global financial markets help companies reduce their capital costs,...

1 The depth and liquidity of the global financial markets help companies reduce their capital costs, improve access to financing, invest more, and grow. True or False? 2 2018 Global Equity Market Capitalization $33.6 trillion True or False? 3 U.S. merger and acquisition announced deals totaled $1.7 trillion in 2018 True or False?

This an International Finance Course Propose the factors that impact market segmentation in global capital markets....

***This an International Finance Course*** Propose the factors that impact market segmentation in global capital markets. Your response should be at lest 200 words in length.

The Global Financial Stability Report is a semiannual report published by the International Capital Markets division...

The Global Financial Stability Report is a semiannual report published by the International Capital Markets division of the International Monetary Fund ( IMF). The report includes an assessment of the risks facing the global financial markets. Locate and download the latest report to get an overview of the most important issues currently under discussion. Also, download a report from five years ago. How do issues from five years ago compare with financial issues identified in the current report?

Subjects