Find the suggestion on how to optimize the world of finances and avoid the destructive power of the global processes. By the way, if you have problems with an essay task from your college just visit this site greatpaper.co.uk for best solution.
Tendencies in Financial Systems’ Coexistence: Solutions
In the modern conditions, the global economy starts a new stage of the global integration and internationalization, and the interconnection becomes much more noticeable. In the modern era, even the smallest failure gets reflected on the whole banking system. That makes all the nations involved into thetrans border operations with finances interested in the stability of economic, political and military situation of every particular actor on the world arena.
The Basis of the Difficulties in World Economics
The world financial crisis has a single background: this is a reaction on the raise of the fictive capital in comparison to the development of the real sector of economics. We face the progress of informational technologies, centralization of capital, openness of economy of the most of countries, including the results of actions of global financial institutes, and possibility of trans border transfer of giant capitals within a short period of time. Under such conditions, the vulnerability of most of banking systems has increased significantly.
Contradictions in the Basis
We can determine the fundamental contradictions that lie in the bases of the economic difficulties.
Firstly, it is a contradiction between the slow transformation of economic structures of the developing nations and the demands of the global economy. Basically, the world demands what some nations are not ready to do yet.
Secondly, it is the contradiction between the possibilities opened by the globalization and the chronic contravention of the macroeconomic stabilization in the states, which are on their development stage.
Both of the contradictions deal with the strong inequality of socio-economic growth of nations on the global level, even though this is a task that cannot be accomplished fully.
Procedures to Be Taken
The crises confirm that the new acts and mechanisms need to be introduced in fighting with it. The work of transnational financial institutes needs to be adjusted to the modern conditions, as well as a renewed architecture of the world monetary system is required to be introduced. To minimize the losses from the potential crisis to the inner market of countries dependent on globalization, it is necessary to strengthen the financial sector of economy of those states. We are talking about building of the dynamic and sustainable economic systems which can contribute to the global development in the field.
So, the real actions to be taken are:
- introducing of mechanisms of the worldwide control on the movement of foreign capital, supporting the clarity of the banking systems of the world;
- launching of a global currency for maintenance of the monetary safety in the world (talking into account that only USD and EUR dominate nowadays, and lots of counties perform a multinational trade without the dollar conversion);
- arrangement of international organs of the trans border regulation of processes of liberalization and internationalization of national banking systems and offering support to national economies that have suffered from the consequences of the financial unwellness worldwide.
Reforming of the world financial system also needs to take care of the regulation of the movement of short-term capitals among countries. Taxes need to be established on them with the aim to prevent the increase of the external loan.
The Control on Addressing the Globally Accepted Actions
All the actors on the world market need to keep the budget discipline and implement the set standards and norms of financial stability. Following of the global standards has a voluntary character, but the international community should have data on the extent to which the financial systems of different states correspond to the accepted standards. Indeed, there is no need in inventions if nobody accepts and actually applied them.
It will also be a good idea for the states to make a mutual treaty on the cooperation in spheres of control for the central clearing counter agents in the field of trans border liquidity. Moreover, it is necessary to define the order of financial sanitation for the core counter agents.
In this context, it is necessary to increase the dependence on the external credit ratings. The standards of activity of the rating agencies should also be set, since their decisions influence the most investment decisions. When having tough times, the changes in positions in worldwide-known ratings contribute to the panics within the nations lowered. Obviously, this only worsens the situation. It looks like today their meaning is underappreciated, and, thus, under controlled.
To Crown Up
So, to handle the modern financial situation, it is necessary to carry a major work on building a world financial community, which would be less sensitive to the crises, and which would make it possible for all the nations to benefit from the advantages of the worldwide financial market, including maintenance of economic growth and bettering in the life level of their population. No wonder that financial wellness is in a strong interconnection with the social health of nations and world in a whole.