Question

Provide 200 words on the question:

What is the impact of global finance on the global world?

Answer 1

The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade financing.

With a framework that is properly fit to purpose, the international financial system of the future will be in a stronger position to fulfil its mandate: connecting financial services providers, corporates, public institutions and households with access to a range of quality, affordable financial products and services .

The principal function or role of the global financial system is to move scarce loanable funds from those who save to those who borrow to buy goods and services and to make investments in new equipment and facilities so that the global economy can grow and increase the standard of living enjoyed by its citizens.

Internationalisation of financial markets is one of the important aspect of global financial system.Domestic financial markets are part of a global financial system
intermediating borrowing and lending between the local nation and the rest of the world necessitated by expanding international trade and production, and the development of multinational corporations.

This has led to Economic Growth of nation's, increased standard of living, better employment opportunities, industrialization, increase in Investment opportunities and massive technological development.

At the some time it has resulted in increased financial inequality between nations, increased online banking frauds, increased risk of global financial crisis, financial instability due to bank runs.