Global Financial System

Information about Global Financial System

The global financial system (GFS) is a financial system consisting of institutions and regulations that act on the international level, as opposed to those that act on a national or regional level. The main players are the global institutions, such as International Monetary Fund and Bank for International Settlements, national agencies and government departments, e.g., central banks and finance ministries, and private institutions acting on the global scale, e.g., banks and hedge funds.

Deficiencies and reform of the GFS have been hotly discussed in recent years.

History

The history of financial institutions must be differentiated from economic history and history of money. In Europe, it may have started with the first commodity exchange, the Bruges Bourse in 1309 and the first financiers and banks in the 1400–1600s in central and western Europe. The first global financiers the Fuggers (1487) in Germany; the first stock company in England (Russia Company 1553); the first foreign exchange market (The Royal Exchange 1566, England); the first stock exchange {the Amsterdam Stock Exchange 1602).

Milestones in the history of financial institutions are the Gold Standard (1871–1932), the founding of IMF, World Bank at Bretton Woods, and the abolishment of fixed exchange rates in 1973.

Institutions

International institutions

The most prominent international institutions are the IMF, the World Bank and the WTO

The International Monetary Fund (http://www.imf.org/) keeps account of international balance of payments accounts of member states. The IMF acts as a lender of last resort for members in financial distress, e.g. currency crisis, problems meeting balance of payment when in deficit and debt default. Membership is based on quotas, or the amount of money a country provides to the fund relative to the size of its role in the international trading system.
The World Bank (http://www.worldbank.org/) aims to provide funding, take up credit risk or offer favorable terms to development projects mostly in developing countries that couldn't be obtained by the private sector. The other multilateral development banks and other international financial institutions also play specific regional or functional roles.
The World Trade Organization (http://www.wto.org/) settles trade disputes and negotiates international trade agreements in its rounds of talks (currently the Doha Round)

Government institutions

Governments act in various ways as actors in the GFS: they pass the laws and regulations for financial markets and set the tax burden for private players, e.g. banks, funds and exchanges. They also participate actively through discretionary spending. They are closely tied (though in most countries independent of) to central banks that issue government debt, set interest rates and deposit requirements, and intervene in the foreign exchange market.

Private participants

Players acting in the stock-, bond-, foreign exchange-, derivatives- and commodities-markets and investment banking are

Legal frameworks and treatises

Major incidents

The most current incidents in the GFS are the Asian financial crisis, the following devaluations in Russia, Brazil and Argentina and the bursting of the Dot-Com bubble

Criticism, discussions and reform

Among the many critics of the GFS are:

The ATTAC network
Joseph Stiglitz
George Soros

treasury is any place where the currency or items of high monetary value are kept. The term was first used in Classical times to describe the votive buildings erected to house gifts to the gods, such as the Siphnian Treasury in Delphi or many similar buildings erected in Olympia,
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bank is a commercial or state institution that provides financial services , including issuing money in various forms, receiving deposits of money, lending money and processing transactions and the creating of credit.
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A hedge fund is an investment fund structured to avoid direct regulation and taxation in major host countries and which charges a performance fee based on the increase of the value of the fund's assets.
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Economic history is the study of how economic phenomena evolved in the past. Analysis in economic history is undertaken using historical methods and statistical methods, sometimes to test economic theories.
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Europe is one of the seven traditional continents of the Earth. Physically and geologically, Europe is the westernmost peninsula of Eurasia, west of Asia. Europe is bounded to the north by the Arctic Ocean, to the west by the Atlantic Ocean, to the south by the Mediterranean Sea,
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Financier (IPA: /ˌfi nÃ£ⁿ ˈsjei/) is a term for a person who handles large sums of money, usually involving money lending, financing projects, large-scale investing, or large-scale money
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The Fugger (IPA: [fugɚ]) family was a historically prominent group of European bankers, members of the fifteenth and sixteenth-century mercantile patriciate of Augsburg, international mercantile bankers, and venture
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Muscovy Company (also called Russian Company or Muscovy Trading Company, Russian: Московская компания), was a trading company chartered in 1555.
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Royal Exchange in the City of London was founded in 1565 by Sir Thomas Gresham to act as a centre of commerce for the city. The site was provided by the Corporation of London and the Worshipful Company of Mercers, and is roughly triangular, formed by the converging streets of
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A stock exchange, share market or bourse is a corporation or mutual organization which provides facilities for stock brokers and traders, to trade company stocks and other securities.
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Amsterdam Stock Exchange is the former name for the stock exchange based in Amsterdam. It merged on September 22, 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext, and is now known as Euronext Amsterdam.
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For other uses, see Gold standard (disambiguation).

The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold.
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The United Nations Monetary and Financial Conference, commonly known as Bretton Woods conference, was a gathering of 730 delegates from all 45 Allied nations at the Mount Washington Hotel, situated in Bretton Woods, New Hampshire to regulate the international
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A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currency's value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as
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Global Financial System

Information about Global Financial System

History

Institutions

International institutions

Government institutions

Private participants

Legal frameworks and treatises

Major incidents

Criticism, discussions and reform

See also

Events and Trends

Births

Events and trends