Financial Service Industry Report

Financial Service Industry Report

Expanded Anna Lindh, a Swedish Social Democratic politician who served as Swedish Minister for Foreign Affairs from 1998 until her assassination in 2003,once said, “Firstly, economic globalisation has brought prosperity and development to many countries, but also financial crises to Asia, Latin America and Russia, and increasing poverty and marginalization (Anna Lindh).” Economic globalization is the assimilation of domestic financial system of a country with the world’s financial markets (Das, 2006). In the world of economics, financial institutions are the leaders in the integration of financial markets globally.

Financial institutions in the Global Economy

Financial institutions are the leading guarantors of agility of trade and industry transactions within the world of finance (Bonvin & Dembinski, 2002). Financial institutions strengthen the global economy. The arms of financial institutions stretching across the nations offer opportunities to distribute wealth. Under-developed countries are able to attain financial services from another country. These monies are redistributed within the country through the provision of financial services amongst the country’s citizens through banking needs.

Through the use of advanced technology, the globalization of the financial services industry has made services available and affordable. Countries are able to research available information and find the financial services industry that is the right fit for their needs. An individual may use the internet to search life insurance quotes and find the right policy with the greatest benefit (Garven, 2002).

Financial institutions guide the economy by establishing economic policies. Government regulations can be guided through financial investment. Financial institutions may invest in domestic and foreign markets. The globalization of the financial services industry has future opportunities available to them to expand its role in globalization of the economy (Robinson, III, 1990).

A Decade o Change

The structure of financial markets has had a remarkable change initiated by financial globalization, but has a long road to follow to be affective globally. To expand the effectiveness of financial services industries, these organizations will have to become more flexible in their globalization policies and have the ability to compete effectively in financial market. Globalization has limited governmental influence, but has added muscle to the influence in policy making by financial institutions (Dorn, 1993).

The credit standards requirements will be equally obtainable for all financial markets. Currently not all countries are on the same financial footing. Equality of credit standards requirements provides poorer countries opportunities to become more stable in meeting financial goals. Foreign currency is will become more recognized and acceptable in international financial markets. Some international markets are much higher in value then others and are able to show stability to meet financial goals. Many poor countries are unable to verify financial stability causing their currency to have no value within the global economy. The acceptance of foreign currency provides the underdeveloped country a tool to use to gain bargaining power in the world of finance (Garven, 2002).

The global integration of economies transforms the composition of the finance world and financial markets (Das, 2006). Anna Lindh stated, “Global markets must be balanced by global values such as respect for human rights and international law, democracy, security and sustainable economic and environmental development (Anna Lindh).” This expansion of financial services industries’ policies lead to strengthening the stakeholder trust in the global financial markets.

Impact