Changes in International Financial Markets

Changes in International Financial Markets What forces have brought a rapid change in the field of IFM? Today’s financial reality is that fiat money knows no national boundary. We do live in a global village era. Development in one country or region can spill over across borders. One branch of study that consider the financial landscape is Financial Management (FM) which is mainly concerned with optimal financial decisions, such as those pertaining to corporate finance with a view to maximize shareholders’ wealth. In case of International Finance the objective becomes more complex and importance of Management is inevitable because it is intricate to determine exchange rate fluctuations and to forecast the cash flow. So, International Finance Management (IFM) is thus, essential for financial managers to fully understand vital international dimensions in the light of maximizing stakeholders’ wealth. Rapid Changes In International Financial Markets Brought About By: The Internationalization Phase On the forefront, the greed to go international stems from the quest of being market seekers, raw material seekers and cost minimizers. Internationalization refers to the increasing importance of international trade, international relations, treaties, alliances and so forth. For these reasons, FM has expanded its global footprint. Included in this wave were the efforts to introduce a dramatic new commercial reality—the global market for standardized consumer products on a previously unimagined scale. Subsequently, IFM provides the required tools and expertise to deal with the international complexities encountered on the way. The Invisible Hand According to neo-classical economics, the market, left of its own devices, will efficiently allocate goods, resources, and services. Promising to benefit the entire globe via unfettered trade and growth, Adam Smith, the father of â€Å"invisible hand†, argued that the basic forces of supply and demand will help allocate resources efficiently. Consequently, the notion of the free market has expanded and today it is practiced on a global scale thus, further fuels the practice of IFM. Advances In Technology IFM gained momentum in the wake of a technological world. Technology has long been a crucial behind-the-scenes financial collaborator. On one side of the coin, online transactions allow for very fast movements of capital between countries, facilitating information dissemination, and clearance and settlement payments without the need of a physical marketplace – often in a matter of seconds. It reduces the cost of doing business internationally. On the flip side, these advances threaten to eclipse the international infrastructure. The importance of IFM is critically questioned when hackers have access to sensitive information with a few clicks of a computer mouse. Liberalization IFM came into being when various countries started opening their doors to each other. This phenomenon is well known as â€Å"liberalization† whereby entrepreneurshad the freedom to capitalizethe opportunity to step their foot in different parts of the world. The spark of liberalization was further aired by swift development in telecommunications and transportation technologies. The resultant of liberalization is today’s dynamic IFM. Globalisation Companies today operate on a global stage and can ignore this fact only at their peril. The term globalization is no longer a buzzword; it already transpired. For Khoo (2003), globalization is understood as the trans-boundary movements of capital, people, goods, information and culture, burst into intellectual awareness in the late 1980s and the 1990s. Globalization allows firms to view the world as one marketplace for all goods and services. The impetus for globalized financial markets came from the governments that had begun to deregulate their foreign exchange and capital markets. For instance, in 1980 Japan deregulated its foreign exchange market. Perhaps the most celebrated deregulation occurred in London on October 27, 1986, and is known as the â€Å"Big Bang.† On that date, the London Stock Exchange eliminated fixed brokerage commissions. These changes were designed to give London the most open and competitive capital markets in the world. It has worked, and today the competition in London is especially fierce among the worlds major financial centers. Deregulated financial markets and heightened competition in financial services provided a natural environment for financial innovations that resulted in the introduction of various complex and sophisticated derivatives products, in particular in over-the-counter (OTC) derivatives markets with interest rates and equities as underlying securities. While the lever aged nature of derivative instruments poses risks to individual investors, IFM provides scope for a more efficient allocation of risks. Integration After the Second World War, the outstanding ingredient influencing trends in IFM is integration. The boundaries between national markets rapidly became blurred leading to the emergence of a global unified financial market. Banks in major industrialized countries increased their presence in each others countries considerably. Non-resident borrowers on an extensive scale are tapping major national market such as the US, Japan, Germany. Today both the potential borrower and the potential investor have a wide range of choice of markets. There are various challenges from the environment and accordingly the scope and relevance of IFM has increased in recent past. Capital Mobility The international mobility of capital has benefited firms by giving them more financial options which has made international finance more dynamic and complex. Capital moves around the world in huge amount; corporations are free to access different markets for raising finance. The enormous opportunities of investments, savings, consumption and market accessibility have given rise to IFM. It is important to note that in IFM, stakeholders are spread all over the world. This development allows investors to diversify their investment portfolios internationally. In the words of a recent Wall Street Journal article, â€Å"Over the past decade, US investors have poured buckets of money into overseas markets, in the form of international mutual funds. At the same time, Japanese investors are investing heavily in US and other foreign financial markets in efforts to recycle their enormous trade surpluses. Privatization The economic integration and globalization that began in the eighties was picking up speed in the 1990s via privatization. Privatization is the process by which a country divests itself of the ownership and operation of a business venture by turning it over to the free market system. Additionally, privatization is often seen as a cure for bureaucratic inefficiency and waste; some economists estimate that privatization improves efficiency and reduces operating costs by as much as 20 per cent. Free- Trade Agreements And Rise of Regional Economic Blocs The doctrine of comparative advantagestates that everyone gains if each nation specializes in the production of those goods that it produces relatively most efficiently and imports those goods that other countries produces most relatively efficiently. In this vein, during the post-war years, theGeneral Agreement on Trade and Tariffs (GATT, founded in 1947)was established in order to improve trade. It has played a key role in dismantling barriers (tariffs, subsidies, quotas) over the years, as a result of which international trade grew manifold. The financial participation of the traders exporters and importers and the international transactions flowed significantly. It also created a permanent World Trade Organization (WTO), which has more power to enforce the rules. Also, The North American Free Trade Agreement (NAFTA) has give promoted international trade and given it a shape. These advancements put into the idea of FM both domestically and globally. On the regional level, formal arrangements among countries have been instituted to promote economic integration. The European Union (EU) is a prime example. The EU includes 28 member states that have eliminated barriers to the free flow of goods, capital, and people. The EU is one of the most advanced forms of economic integration, a free trade area (like the NAFTA) is the most basic. Recently, however, the euro’s emergence as a global currency was dealt a serious setback in the midst of the debt crisis. It started in December 2009 when Greece revealed its budget deficit, surprising financial markets. The panic spread to other weak European countries, making borrowing and refinancing extremely costly and threatening the nascent recovery of the world economy from the global financial crisis of 2008. This debt crisis revealed a profound weakness of the euro as the common currency: the participating countries have achieved monetary integration, but without fiscal integration. Mea ning that taxation, spending, and borrowing remain under control of national governments. Therefore, a lack of fiscal discipline in one country can become a Europe wide crisis. So, what has been the role of IFM? Even the effective use of IFM could not prevent the disaster. The Rise of MNCs All because of liberalization and those international agreements, we have a buzz word called â€Å"MNC† i.e. Multinational Corporations. In the post WTO regime (after 1999 onwards), it has became pertinent to note that MNCs enjoy an edge over other normal companies because of its international setting and best opportunities with their world-wide. IFM has become an important wing for all big MNCs. Without the expertise in IFM it can be difficult to sustain in the market because international financial markets have a total different shape and analytics compared to the domestic financial markets. A sound management of international finances can help an organization achieve same efficiency and effectiveness in all markets. So far, so good! Foreign exchange risk As discussed above that globalization opened new horizons, but it also brings companies to a variety of risks that they can face while operating in an international arena and in this regard IFM is the only solution to mitigate these risks. One such risk is foreign exchange risk Seventeen years ago, The Bretton Woods System gasped its final breath whereby the present International Monetary System set up is characterised by a mix of floating and managed exchange rate policies adopted by each nation keeping in view its interests. The foreign exchange risks states the variation in the prices of currency will have a tendency to convert a profitable deal to a loss making one. If the only tool you have is a hammer, every problem looks like a nail. The wisdom of this old adage is just as applicable in risk management. IFM provides a variety of hedging techniques to control foreign exchange exposure since it jeopardizes profitability of all firms. They consider any use of risk management tools, such as forwards, futures and options that previously were virtually unknown. Financial innovation has played a role in promoting this unexpectedly good economic performance. At the same time, IFM has helped to raise global growth and to have made the economy more flexible and more resilient. Conclusion The foremost rapid changes in IFM have been the accelerating globalisation and integration. These developments have been fostered by the liberalisation of markets, rapid technological progress and major advances in telecommunications. Further the scope of IFM has widened its horizon with mechanism supported by multilateral trade agencies like WTO- and regional blocks like ASEAN, NAFTA, EU etc and the emergence of innovative financial instruments. In view of globalization and its impact on the economy of the world, it is pertinent to note that the theory and practice of IFM is in consonance with the tax environment, legal obligations, foreign exchange rates, interest rate fluctuation, capital market movements, inflationary trends, political risk and country risk, micro and macroeconomic environment changes, ethical constraints etc. These problems can be managed through proper adaptation of IFM methodologies. IFM is crucial to the success of every multinational business because the increase in complication and challenges for managers. The current scenario and outlook for evolution of the IFM registered sharp deterioration over the last years. To a great extent, the unfavorable environment is a result of cutbacks in net inflows of private capital. Among the factors responsible one could list the slow pace of world economic recovery, particularly in the United States in the wake of the 2007 recession; Ponzi scheme frauds; forecasts of lower business profits; reductions in consumer confidence; and accentuated growth in risk aversion on the part of investors. References Online EBook: Eun−Resnick: International Financial Management, Third Edition I. Foundations of International Financial Management.  © The McGraw−Hill Companies, 2004

Influence of Games on Children Essay -- Recess Playing Games Argumenta

Influence of Games on Children Webster’s Dictionary defines â€Å"game† as â€Å"sport of any kind; jest, frolic† but what if games are more than that? Not to suggest that games are a serious business. Their whole purpose is amusement and entertainment. However, games—specifically those that are originated and executed to the backdrop of an elementary school playground—are essential to character development in young children. Currently, there is a trend across the country in school districts to ban the recess essentials that older generations know and cherish. These â€Å"games† are a necessity for our nation’s youth. They install children with the skills needed to live a morally sound, virtuous, mentally proficient, and physically durable life. Several states across the country (New York, Virginia, Maryland, Maine, Ohio, Texas, and California for example) are embarking on a ridiculous mission to oust games involving contact from school yards. The main concerns include dodge ball (sometimes referred to as bombardment), tag, football, and in some instances, swinging. You heard right. Swinging has been added to the list of contact sports. Educators are concerned that children may push each other on the swings too hard. Alright, fair enough. But why dodge ball and tag?! The velocity and force of impact of an inflated, rubber sphere of doom is apparently disconcerting. Pushing has become problematic in both tag and football. Then, one cannot overlook the immense mental stress that these sports can cause. Children develop self-esteem issues when they are â€Å"it† in tag or last chosen in dodge ball and football. And bullies are developed in these games: children that naturally take advantage of those who are smaller, weak er, and slower than them... ...ome a part of. These games help to forge youth into the successful, business savvy, socially tolerant individuals that our nation needs. The individuals who care for one another, yet are not afraid to stand up and cry â€Å"injustice!† (or â€Å"time out!†, if you will). The ones who recognize right from wrong, and have enough sense to make the world into the place they want to raise their kids in. A place of dreams and of schoolyard games. Works Cited Comte-Sponville, Andrà ©. A Small Treatise on the Great Virtues. New York: Metropolitan/Owl Books, 2001. 30 – 85. Sealey, Geraldine. â€Å"Is Tag Too Tough For Kids?† ABC News 24 June 2004. 19 October 2004 Louey, Sandy. â€Å"Recess Gets Regulated.† The Sacramento Bee – News 22 August 2004. 19 October 2004 .

A Scholar-Painter’s Diary: Response on the Contents of the Diary of Guo Bi

The necessity of ensuring that the upper-class men of ancient China were both trained in the various forms of the arts [i. e. poetry, painting, and calligraphy] as well as the duties involved in official service may be seen as a result of Chinese philosophy’s ethical realism. Ethical realism is the belief that there is a dynamic and relational association between man and the world and as such man’s duty is to follow the rational and ethical principle which will bring him into harmony with society and the universe (Mei, 1967, p. 150). This harmony however may only be achieved through the individual’s mastery of the arts since the arts are the manifestation of the spirit of conduct. The development of the virtue of conduct, along with the other virtues of righteousness, propriety, and wisdom necessitate the individual’s attention to continuous self-cultivation. Since self-cultivation entails the development of the virtue of conduct, it is thereby necessary for the individual to continually develop as well as manifest his virtue of conduct through the contemplation of art and nature as well the creation of his own art works. The manner in which an upper-class man develops his virtues through the arts is evident in the diary of Guo Bi. Providing a brief description of the events that occurred during his stay at Xinghua from the 12th day of the sixth month, 1309 to the 27th day of the same month in the same year, one notices that the main occupation of Guo Bi, along with his companions, involves the production and contemplation of artworks and the contemplation of nature while drinking wine. During this period, Guo Bi was able to produce ‘twenty wine poems’, ‘a picture of an impressive stone’, ‘a calligraphy scroll’, ‘a picture of orchids’, ‘calligraphy and bamboo drawings’ as well as a calligraphy inspired poem (Ebrey, 1993, p. 199). In the course of his stay in the region, one notices that the various art works mentioned above were used as a means of showing gratitude towards the individual visited by Guo Bi. Artworks, in this sense, may be seen as the material manifestation of conduct towards other individuals in Chinese society during that period.

Free Essays on Where I Stand

There is â€Å"a price to be paid,† as the clichà © goes; the best things in life aren’t for free. However, most people would debate the merit of this old saying. Whether you are buying yourself a suitable lifestyle, or considering matters of the heart, a price just may be paid even if the payment isn’t a dollar amount. Some people may think the best things in life are material possessions, but every person knows they come with a price. Sometimes this price can be very high. One may spend every penny he owns on collecting wonderful ornaments for his home, and realize that his efforts were in vain for he has no one to share them with. Or, perhaps, he finds himself in debt so far that there is no possible way to get out. Many people suffer from debt. Though it is safe to say many more people have suffered a broken heart. You cannot buy love, although several have tried, but a high price is paid for it. Women and men alike pay for their children’s lives either to spend their life working to have the means to raise them, or to sacrifice dreams they had in order to raise them. Women and men also pay for romance in way much like that of having children. Maybe they sacrifice dreams of careers, or a matching mate, no matter what the sacrifice is; they must pay for something that they want. Jennifer Lopez sang a song titled â€Å"My Love Don’t Cost a Thing†. In her music video, she portrays a woman who receives many expensive gifts from her lover because he is too busy to spend time with her. The contradiction is that her love does cost something. He has a career that consumes much of his free time and, in order to keep her he has to sacrifice his job. While it may seem pessimistic, nothing in this world is free of charge.... Free Essays on Where I Stand Free Essays on Where I Stand There is â€Å"a price to be paid,† as the clichà © goes; the best things in life aren’t for free. However, most people would debate the merit of this old saying. Whether you are buying yourself a suitable lifestyle, or considering matters of the heart, a price just may be paid even if the payment isn’t a dollar amount. Some people may think the best things in life are material possessions, but every person knows they come with a price. Sometimes this price can be very high. One may spend every penny he owns on collecting wonderful ornaments for his home, and realize that his efforts were in vain for he has no one to share them with. Or, perhaps, he finds himself in debt so far that there is no possible way to get out. Many people suffer from debt. Though it is safe to say many more people have suffered a broken heart. You cannot buy love, although several have tried, but a high price is paid for it. Women and men alike pay for their children’s lives either to spend their life working to have the means to raise them, or to sacrifice dreams they had in order to raise them. Women and men also pay for romance in way much like that of having children. Maybe they sacrifice dreams of careers, or a matching mate, no matter what the sacrifice is; they must pay for something that they want. Jennifer Lopez sang a song titled â€Å"My Love Don’t Cost a Thing†. In her music video, she portrays a woman who receives many expensive gifts from her lover because he is too busy to spend time with her. The contradiction is that her love does cost something. He has a career that consumes much of his free time and, in order to keep her he has to sacrifice his job. While it may seem pessimistic, nothing in this world is free of charge....

Bacteria Relationships - Bacteria and Humans

Bacteria Relationships - Bacteria and Humans Bacteria are all around us and most people only consider these prokaryotic organisms to be disease-causing parasites. While it is true that some bacteria are responsible for a large number of human diseases, others play a vital role in necessary human functions such as digestion. Bacteria also make it possible for certain elements such as carbon, nitrogen, and oxygen to be returned to the atmosphere. These bacteria ensure that the cycle of chemical exchange between organisms and their environment is continuous. Life as we know it would not exist without bacteria to decompose waste and dead organisms, thus playing a key role in the flow of energy in environmental food chains. Are Bacteria Friend or Foe? The decision as to whether bacteria are friend or foe becomes more difficult when both the positive and negative aspects of the relationship between humans and bacteria are considered. There are three types of symbiotic relationships in which humans and bacteria coexist. The types of symbiosis are termed commensalism, mutualism, and parasitism. Symbiotic Relationships Commensalism is a relationship that is beneficial to the bacteria but does not help or harm the host. Most commensal bacteria reside on epithelial surfaces that come in contact with the external environment. They are commonly found on the skin, as well as in the respiratory tract and the gastrointestinal tract. Commensal bacteria acquire nutrients and a place to live and grow from their host. In some instances, commensal bacteria may become pathogenic and cause disease, or they may provide a benefit for the host. In a mutualistic relationship, both the bacteria and the host benefit. For example, there are several kinds of bacteria that live on the skin and inside the mouth, nose, throat, and intestines of humans and animals. These bacteria receive a place to live and feed while keeping other harmful microbes from taking up residence. Bacteria in the digestive system assist in nutrient metabolism, vitamin production, and waste processing. They also aid in the hosts immune system response to pathogenic bacteria. Most of the bacteria that reside within humans are either mutual or commensal. A parasitic relationship is one in which the bacteria benefit while the host is harmed. Pathogenic parasites, which cause disease, do so by resisting the hosts defenses and growing at the expense of the host. These bacteria produce poisonous substances called endotoxins and exotoxins, which are responsible for the symptoms that occur with an illness. Disease-causing bacteria are responsible for a number of diseases including meningitis, pneumonia, tuberculosis, and several types of food-borne diseases. Bacteria: Helpful or Harmful? When all of the facts are considered, bacteria are more helpful than harmful. Humans have exploited bacteria for a wide variety of uses. Such uses include making cheese and butter, decomposing waste in sewage plants, and developing antibiotics. Scientists are even exploring ways for storing data on bacteria. Bacteria are extremely resilient and some are capable of living in the most extreme environments. Bacteria have demonstrated that they are able to survive without us, but we could not live without them.

The Effects Of Mobile Phones Essay Example | Topics and Well Written Essays - 500 words

The Effects Of Mobile Phones - Essay Example Health Problems According to BBC News (2002), studies have linked the use of mobile phones with headaches, hotspots in the brain as well as cancer. However, Foster and Moulder (2000) indicated that lawsuits that have been filed in courts in the United States have not been able to provide any concrete evidence of this claim as there has been no proven associated increase in cancer among the population and the complainants have not been able to provide any evidence to substantiate that their case is caused by the use of mobile phones. ARPHANSA (n.d.) has also indicated that although there is a possibility of a small risk, there is no clear evidence in the scientific literature to suggest that it poses a long-term health hazard. Teenagers are high users of mobile phones. Studies carried out in the U.K. have found that approximately 80% of 11 to 14 year olds own a mobile phone (The Institute of Science in Society n.d.). Studies also indicate that prolonged use may cause teenage brains to age prematurely (The Institute of Science in Society n.d.). Behavioral Problems in Young Children According to Divan et al (2010), prenatal and postnatal exposures to mobile phones have resulted in behavioral problems in young children.

Case study Essay Example | Topics and Well Written Essays - 1000 words - 41

Case study - Essay Example For Virgin Company, the major resource is Richard, its founder. He portrays strong leadership which very important in developing new capabilities for the company. His carefree adventure and entrepreneurial skills helped him in coming up and implementing his new business ideas. He is very aggressive leader and his devotion to business has resulted in the establishment of other Virgin Companies such as Virgin Cola, Virgin Rail, and Virgin Record and Virgin Atlantics. His leadership role has enabled him to establish a strong corporate culture and also promote the image of the company and the spirit of entrepreneurship. He believes in doing things differently and thus does not advocate for bureaucracy and thus he has become more strategic and charismatic leader and his business dream have been the force behind the success of the Virgin companies (Hellriegel & Slocum, 2010:344). Virgin brand is also another major link (Enz, 2010:345). The names of the brands and the trade marks acts as reputation assets. With the brand the group has been able to create other companies with similar quality since the Virgin brand has instilled confidence in customers (Thorne and Pellant, 2007:234). The brand gives the firm, its competitive advantage in the market and thus helps a lot in safeguarding and attracting a new market share for the company. The companies have also got enough investments and working capital. Richard Branson ensures that all the companies are well funded and the proceeds from one company may be used to invest in another company. This was the case in 1992 when a Virgin record was sold to EMI and the funds realized was used in Virgin Atlantic. This helps to ensure that all the companies are running and thus offering the best opportunities for growth (Plunkett, 2009b:34) Virgin Companies in its growth strategy have diversified into several business