Impacts of Financial Liberalization and Innovations in the Financial Globalization- Cross-Border Listing and Carry-Trade
Impacts of Financial liberalization and innovations in the financial globalizationcross-border listing and carry-trade
Introduction Borrowers and investors in public and private sectors always seek for highly profitable opportunities beyond their home countries. After the Second World War, a tendency to international cooperation empowered. Financial liberalization, technology developments, and financial innovations have been the essential drivers for the financial globalization. This paper begins with the financial liberalization debate and its impact on the international capital flows. In view of the financial globalization, Carry-trades and cross-border listings will be emphasized.
The impacts of financial deregulation on financial globalization After the World War II, most of countries were interested in a new era without previous international challenges. The Bretton woods international system was founded in order to develop international trades based on a fixed exchange rate in isolated financial domestic systems. Bretton woods could not be feasible in all aspects so international finance has experienced lots of changes. It was obvious that separated financial systems could not be continued. International supervisory over the financial markets has been emerged to prevent and manage international capital flows among countries. Researches shows that any intervention from the states may have some benefits in short-term but its costs in the longterm would offset all the benefits and probably made it worse. (Weber and Arner, 2007)
Financial deregulation and liberalization has many interpretations as International Monetary Fund classified on two capital regimes: a “no control” regime and a “controls” regime before1995 which still nearly remained but with a more comprehensive report. Criteria to measure financial deregulation and liberalization might be based on foreigners‟ participation in the domestic listed companies and their permission to transfer
Introduction Borrowers and investors in public and private sectors always seek for highly profitable opportunities beyond their home countries. After the Second World War, a tendency to international cooperation empowered. Financial liberalization, technology developments, and financial innovations have been the essential drivers for the financial globalization. This paper begins with the financial liberalization debate and its impact on the international capital flows. In view of the financial globalization, Carry-trades and cross-border listings will be emphasized.
The impacts of financial deregulation on financial globalization After the World War II, most of countries were interested in a new era without previous international challenges. The Bretton woods international system was founded in order to develop international trades based on a fixed exchange rate in isolated financial domestic systems. Bretton woods could not be feasible in all aspects so international finance has experienced lots of changes. It was obvious that separated financial systems could not be continued. International supervisory over the financial markets has been emerged to prevent and manage international capital flows among countries. Researches shows that any intervention from the states may have some benefits in short-term but its costs in the longterm would offset all the benefits and probably made it worse. (Weber and Arner, 2007)
Financial deregulation and liberalization has many interpretations as International Monetary Fund classified on two capital regimes: a “no control” regime and a “controls” regime before1995 which still nearly remained but with a more comprehensive report. Criteria to measure financial deregulation and liberalization might be based on foreigners‟ participation in the domestic listed companies and their permission to transfer
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