What is Global Financial System
The global financial system in the world compromises an extensive macro element framework of the institution. Including the legal agreements involving informal and formal economic processes. As a result, they dictate the outflow of all finances. Or investment financing at the international. And national levels—the first modernized global financial system in the 19th century.
During the modern wave of globalization regarding funding. And economy at the international level, including various central international banks. And multinational organizations in the global market.
Collective governance structures at the international level for ensuring the effective operation of the global financial. And monetary system’s” is what the Global Financial Architecture is (Elson 2010: 17).
How new Architecture of Global Financial System became modernized
The redesigning and the new architecture of the global financial system became modernized. When various questions regarding the inappropriate exchange rate regime came into being in the international market. The recent financial crisis also emerged in the international market economy. It consists of business entities to control it as a policymaker. The new architecture of the global financial system consists of two mechanisms.
Fixed exchange rate mechanism that armors the small entities to retain. This stability in the international market using dollarization. At the same time, large business companies. Such as European Union and the United States allow their currencies to be unstabilized. And float in the international market. On the other hand, the large companies use the intermediate regimes to make a fixed rate in various entities. Such as bands and claws, which are appropriate for some entities in the international market.
Global international financial architecture reform, 2000
Within the last past few years, they have been seen up dramatic fall in the financial system. And cope with this situation, strengthen the international monetary system. By making the new architecture of the global financial system.
Monitoring and detection
In the new reform, various new policies in strategic plans are made to decrease work vulnerability. Which will help different countries access their risk problems regarding finance and economy. In addition, monitoring the financial system regulation regarding economics. And finance is upgraded under various institution supervision, including banks, to modernize the global economy and financial system.
International codes and standards
They made technical standards and codes to ensure that economic. And financial systems worked well at the national and international levels.
Measures to increase transparency
In the international market, various international strategic plans. And measures steps taken monthly to update the data information. Regarding various issues to reduce future crises.
The implication of the policies
Both the international monetary system. And the international financial system responsible for implementation regarding policies. And making new creative policies to control the future economic crisis.
The international financial system comprises various assets and interests. Including the non-bank and bank economic institutions. And global markets that determine the assets. The International financial system refers to responsible for the effective working and creative management of the International monetary system. It allows the various international currencies to support the payout system at the national and international levels.
They refer to interested in the current system. As a result, the growing prominence of BRICS will not assist the global South they profess to represent. The piece urged that effort be put into developing a new body. That makes more accountable and perhaps less enmeshed in the system.
Basic Functions Of Global Financial
As previously indicated, public funds are channeled. Through the financial system to individuals involved in production.
Money in the form of deposits offers the least risk of all financial instruments. But its value eroded mainly by inflation.