Global Financial System «

Global Financial System

The international monetary funds are the ones which keep account of the international balance of payments. The IMF is the lender of resort for the members and thus they help the countries in distress. The member ship is gained on supplying money; the money amount may vary from size of the role the country plays in the organization. Secondly, the World Bank aims to provide funds; they take up credit risk and offer feasible terms and conditions to all of their members. They also support countries in making the developmental projects the government decides to establish. The WTO or world trade organization provides settlement of disputes and thus helps countries to trade worldwide.

Next the bank for international settlements is another financial institution that provides finance to countries on another aspect. Then the institute of international finance provides the largest and worldwide commercial and investment banks. Similarly, in this global financial system are also government institutions. These government instructions act actively in discretionary spending. They are closely tied to central banks that issue government debt. They also set interest rates and deposit requirements along with these services they play a role in the foreign exchange market also.

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They act as a way of identifying, recording and communicating financial information about business to the stake holders. The accountant who analyses the data for you should be well educated so that he does not place in to more problems. They should be able to advise you well on your business plan. When a financial system is established it is necessary to take into consideration the risk that is put forward. This allows you to minimize your risk level Thus it should be implemented while setting up the plan the owner should take in the insurance and health policies.

The financial system is very beneficial to the economy. Firstly, the financial sector provides payment services. Sometimes it is difficult to carry a lot of cash. Financial institutions provide cheques, debit cards and credit cards for easy payment of purchases and sales. They also provide matching of saver and investors. Sometimes the people save for retirement and many investment projects. Thus these financial institutions provide accounts in which you can save your money and even gain profits on them.

They also help in generating and disturbing information. Banks also collect information about the firms that borrow from them; the resulting information is one of the most important components of the “capital” of a bank, although it is often unrecognized as such. In these regards, it has been said that financial markets represent the “brain” of the economic system.

Thus there are many other several functions and no doubt these play a major role in a country.


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