Financial Globalization: Unequal Blessings (original) (raw)

Financial globalization: A glass half empty?

Handbook of Finance and Development

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Financial globalization: opportunities and challenges for developing countries

2001

This chapter discusses the opportunities and challenges that financial globalization entail for developing countries. Financial globalization can come with crises and contagion. But financial globalization can also lead to large benefits, particularly to the development of the financial system. The net effect of financial globalization is likely positive, with risks being more prevalent right after countries liberalize. In the long run, large potential gains are expected. So far, only some countries, sectors, and firms have taken advantage of globalization. As financial systems turn global, governments lose policy instruments, so there is an increasing need for international financial policy coordination. * We thank the participants of the Globalization Policy Research Report and seminar participants at a workshop organized by the World Bank Managing Volatility Thematic Group for very helpful discussions. We also thank , who gave us several specific comments and suggestions.

Rethinking Financial Globalization

IntechOpen eBooks, 2022

This chapter introduces the concept of financial globalization and examines the factors driving financial globalization in emerging and developing market economies. The role of financial globalization in driving development and strengthening of the financial sector, sustainable economic growth, and the nature of innovations are explored. On a broader scale, there is a need to understand the developments in global financial innovation and implications for developing and emerging markets. The chapter explores the challenges, and risks and benefits of financial globalization to emerging and developing markets and how they will shape future behavior and interactions by economic agents in these markets. Financial globalization can lead to different outcomes that include but not limited to domestic capital flight and potential effects on net capital flows, investment, and growth; capital inflows and higher investment and growth; or volatile capital flows and unstable domestic financial markets. The chapter discusses the measurement issues on financial openness. These all need to be explored in this context and considering the rise in innovations in the financial sector.

Financial Globalization and Economic Policies

SSRN Electronic Journal, 2000

We review the large literature on various economic policies that could help developing economies effectively manage the process of financial globalization. Our central findings indicate that policies promoting financial sector development, institutional quality and trade openness appear to help developing countries derive the benefits of globalization. Similarly, sound macroeconomic policies are an important prerequisite for ensuring that financial integration is beneficial. However, our analysis also suggests that the relationship between financial integration and economic policies is a complex one and that there are unavoidable tensions inherent in evaluating the risks and benefits associated with financial globalization. In light of these tensions, structural and macroeconomic policies often need to be tailored to take into account country specific circumstances to improve the risk-benefit tradeoffs of financial integration. Ultimately, it is essential to see financial integration not just as an isolated policy goal but as part of a broader package of reforms and supportive macroeconomic policies.

Financial GlobalizationA Reappraisal

The literature on the benefits and costs of financial globalization for developing countries has exploded in recent years, but along many disparate channels and with a variety of apparently conflicting results. For instance, there is still little robust evidence of the growth benefits of broad capital account liberalization, but a number of recent papers in the finance literature report that equity market liberalizations do significantly boost growth. Similarly, evidence based on microeconomic (firm- or industry-level) data shows some benefits of financial integration and the distortionary effects of capital controls, while the macroeconomic evidence remains inconclusive. We attempt to provide a unified conceptual framework for organizing this vast and growing literature. This framework allows us to provide a fresh synthetic perspective on the macroeconomic effects of financial globalization, in terms of both growth and volatility. Overall, our critical reading of the recent empiric...

Financial Globalization: Some Conceptual Problems

SSRN Electronic Journal, 2000

We are grateful to Ilene Grabel and Ajit Singh for helpful comments. They are in no way responsible for any remaining errors. 'regionalism' rather than financial globalization. 5. Historically speaking, the only time the world ever came close to such a situation was during the late 19th century, when Britain ruled the world. Banking crises in the late 19 th century brought about an end to what appeared to have been the beginnings of financial globalization. Since then an attempt was made in 1944 but it collapsed in 1973, with the abolition of the fixed exchange rate by the USA. This led to the emergence of regionalism, which is perhaps still in a transitional phase (Harris, 1998).

53-60 Financial Aspects of Globalization

2009

The defining process with profound implications on the economy and society is represented by the globalization. From this perspective, we have analysed the new dimensions of capital accumulation and economic growth in the context of deregulation and liberalization of the international capital movements. In this context, we have noticed the increasing influence of the financial markets on the economy, the tendency to remove the finances from the real economy requirements, the growing role of external financing using more volatile capital goods, increased competition regarding the access to financing, the significant increase of power of the international capital markets whose characteristic is represented by the increased instability, the implications of the investors' obsession with an excessive profitability of their own funds and the expansion of using sophisticated financial products. Realities of today's financial markets, which are the subject of numerous studies and an...

Chapter 5. Financial Globalization: Opportunities and Challenges for Developing Countries

2000

This chapter discusses the opportunities and challenges that financial globalization entail for developing countries. Financial globalization can come with crises and contagion. But financial globalization can also lead to large benefits, particularly to the development of the financial system. The net effect of financial globalization is likely positive, with risks being more prevalent right after countries liberalize. In the long

Financial Globalization and its after effects

Purpose-The purpose of this paper is to highlight certain issues of globalization and uncontrolled expansion of financial investment across the borders that have created the problem of instability and insecurity among the investors and general public in developed and developing countries.