CURRENT TRENDS IN INTERNATIONAL CAPITAL MARKETS

CURRENT TRENDS IN INTERNATIONAL CAPITAL MARKETS

 Mrs. P. PIRAKATHEESWARI, Lecturer in Commerce,

Sri Sarada College for Women (Autonomous), Salem – 16.

 

Introduction

Globalization and modern information technologies give the traditional notion “world economy” of today totally different, new value. The term “financial globalization” understands the world as connected, interdependent, and continues to integrate a limitless market. In contrast, the concept of “internationalization” as applied to the world economy, which economists said and written before the 80-ies, implies active relationship with the world of national and regional independent markets.

Globalization financial markets, has today revolutionary in its effect effects not only for the world’s financial markets in general, but also for international investors and borrowers of capital, based on the globalization of trade flows.  In the 60 years the process of globalization began to develop on the basis of internationalization of production, capital and market in goods, in the first place within the triangle of America-Europe-Asia. Industry has played a leading role in relation to the financial sector.

 Modern Economy

In the modern world economy, trade ceded leadership monetary and financial relations in the intensification of the globalization process. Last quarter century is characterized by large changes in the world finance, the introduction of numerous innovations in the organization, management banks and forms on-sluzhivaniya corporate and individual clients. Warehouses-lished centuries techniques and methods of banking, mustache-false, acquire new features. At the same time, there are numerical experiments with new original types of operations and services, which had no analogues in world practice and made possible through a complex combination of factors influencing demand and the offer of money capital.

International Markets

Internationalization markets means that the nature of operations both borrowers and lenders, the broad diversification of their assets and liabilities across countries and regions, the presence of strong network offices, branches and subsidiaries abroad no longer allow olitse-create them only with the country of nationality. In the global nom scale resource “capital” acquired substantial mobility mobility. Capital flows around the world toward the most attractive and more profitable opportunities of its application.

Globalization markets means the process is very similar to the internationalization and consists in strengthening the role of international markets in terms of operations borrowing and lending by residents of different countries. Internationalization and globalization lead to in-growth of the international network of financial institutions and corporations, to increase the proportion of business accounted for by foreign countries.

Globalization financial markets also means convergence, convergence conductivity and the identity of prices and quality in a certain period of time for a specific financial product throughout world. At the same time not taking into account the local cost-ARE or other local conditions.

Financial Sector

In financial sector, market participants such as banks, financial institutions, stock exchanges, Governments, central banks, the media, borrowers, investors and manufacturers information technologies affect the most important factors of financial globalization. By the interaction between themselves and with participants factors may include: in-stitutsionalnye/ mezhdunarodnye capital flows, the modern theory portfolio management, the professionalism of the participants, financing the PV innovation, liberalization and deregulation of markets, competition, the search for new more profitable opportunities for capital investment, free movement of capital, competition for access to capital, ox-tilnost markets, information technology, securitization, standardization of financial products, markets developing countries, demographic situation, the amount of savings. So called parties are the engine of globalization.

  Financial interdependence of national economies of developing counlas gradually against the background deepening division of labor, mustache-root NTP. Raw resources have globalized first in 1960, they were followed by currency derivatives instruments, securities and indices. Developing or emerging markets (emerging markets), despite the emerging monetary and financial crises, the long term are considered an important integrated part of Global resentatives of the financial world.

For international investors and borrowers loom in the end the following opportunities/ requirements of globalized financial market.

More high level of diversification / high rate of innovation

  International investors and borrowers are facing today neoh-cotton choice between markets, financial products, currencies, risks, etc. Globalized stock society is in the global financial markets, new investors. Active Participants receive an additional review of markets, products, capital flows and competitive situation. Global competition also makes the press maintain the pace of introduction of innovations, usually higher than the one-sound of market, protected by national protectionist policies.

More high liquidity – Among the participants of globalized markets and financial fields are characterized by products in most cases improved face-visibility. This is especially true to formally organized-nym financial markets.

Professional Risk Management – Globalization information technology, financial innovation-tion and modern theories portfolio management will-whether for a short time to develop special system of risk management and optimization: the risks are classified, evaluated, re-arranged, removed, and are limited. Thus, risks from substituting the place where they can then be assessed, identified, desirable, portable and controllable.

More efficient allocation of capital– Globalization and information technology have brought the possibility of more effective distribution of investment capital, at least in the medium term. In essence, globalization promotes the mutual understanding with the investor and the borrower.

Financial Globalization implies the markets as a rigid, free from emotions allocators of capital towards the most effective investment opportunities in other specified conditions on a global scale. Due to the fact that investment opportunities, as mentioned above, never evaluated shareholders and shareholders in the absolute, but on the contrary, they both have different views on the more profitable alternative use of capital, pressures of globalization can be seen as balanced against the risk catalyst for rational allocation of capital.

More complex chains of influence – Globalization financial markets creates a new, primarily external cause-effect chain: the facts of world politics, economy, science, demography, etc. involve in emotional force of their people’s perception of the most unexpected reaction, which immediately reflected in the national and international course of events.

Speculation global actors on the regional stock exchanges

Globalization financial markets often leads to the difference between global and oriented to the domestic market participants. Thus, regional or national capital markets that are important to be able to quoted small and medium-sized enterprises can be used to obtain margin. It is small and medium exchanges is expected to contribute building up their competitiveness as members of integrated global markets. In this process of globalization can positively influence on net domestic markets, if not revolutionary measures, at least evolution. 

Globalization financial markets increases the potential misuse of the set various financial instruments. Each instrument hedging can be used for speculative. Short-term profits can go to against future risks and liabilities.  The more important and become more urgent technical queries to a modern, world network system, which identifies and calculates the mutual obligations. Also crucial to more advanced systems, serving payment flows, securities trading and safekeeping of securities. 

Conclusion

In general, self-regulating and self-correcting market forces would have been perhaps the most optimal and effective solution.  However despite all the potentially dangerous moments, the benefits (or chances) provided by the globalization of financial markets outweigh. Decisive in this are the following assumptions: first, the necessary self-discipline (in framework manages the complexities of globalization and the concentration capital through prudent official observation), and secondly – reliable choice of partners (only institute of the highest class of all-encompassing set of financial products and the appropriate configuration information technologies can be considered as a partner).

References:

Globalisation and Poverty: Centre for International Economics, Australia.
Globalisation Trend and Issues T.K.Velayudham,
Globalisation and Liberalisation Prospects of New World Order Dr.A.K.Ojha, Third Concept An International Journal of Ideas, Aug 2002.
Globalisation: Imperatives, Challenges and the Strategies.