GLOBAL FINANCIAL

SYSTEM

INTRODUCTION
The Global financial system ( GFS ) is the financial system consisting
of institutions and regulators that act on the international level, as
opposed to those that act on a national or regional level. They help in
prevention and resolution of banking, currency and debt crises.
The financial stress and crises are rarely contained by national
borders. Yet, financial regulations remain largely in the domain of the
nation. The US meltdown of 2007 has created worldwide concerns
because of visible integration of the markets.
There is a widespread recognition that global financial stability also
rests on national systems and hence requires enhanced measures at
the country level as well.

MOTIVES FOR GLOBAL INTEGRATION

Global trade
Global investments
Government cooperation
Technology advancement
Emerging markets

GLOBAL FINANCIAL INSTITUTIONS

IMF International Monetary Fund
The International Monetary Fund (IMF) is an organization of
188 countries, working to foster global monetary
cooperation, secure financial stability, facilitate international
trade, promote high employment and sustainable economic
growth, and reduce poverty around the world.
Created in 1945, the IMF is governed by and accountable to
the 188 countries that make up its near-global membership
The IMF's primary purpose is to ensure the stability of the
international monetary systemthe system of exchange
rates and international payments that enables countries
(and their citizens) to transact with each other. The Fund's
mandate was updated in 2012 to include all
macroeconomic and financial sector issues that bear on
global stability.

WORLD BANK
World bank provide low-interest loans, zero to low-interest
credits, and grants to developing countries. These support a
wide array of investments in such areas as education, health,
public administration, infrastructure, financial and private
sector development, agriculture, and environmental and
natural resource management.
Some of our projects are co-financed with governments,
other multilateral institutions, commercial banks, export
credit agencies, and private sector investors.
The World Bank Group has set two goals for the world to
achieve by 2030:
End extreme poverty by decreasing the percentage of
people living on less than $1.90 a day to no more than 3%
Promote shared prosperity by fostering the income growth of
the bottom 40% for every country

WTO
The World Trade Organization (WTO) is the only global international
organization dealing with the rules of trade between nations. At its
heart are the WTO agreements, negotiated and signed by the bulk
of the worlds trading nations and ratified in their parliaments. The
goal is to help producers of goods and services, exporters, and
importers conduct their business.
It is an organization for trade opening. It is a forum for governments
to negotiate trade agreements. It is a place for them to settle trade
disputes. It operates a system of trade rules. Essentially, the WTO is a
place where member governments try to sort out the trade
problems they face with each other.
The WTO is run by its member governments. All major decisions are
made by the membership as a whole, either by ministers (who
usually meet at least once every two years) or by their
ambassadors or delegates (who meet regularly in Geneva).
As on 30th November, 2015 there are 162 member countries.

BANK FOR INTERNATIONAL

SETTLEMENTS (BIS)
Established on 17 May 1930, the BIS is the world's oldest international
financial organisation. The BIS has 60 member central
banks, representing countries from around the world that together
make up about 95% of world GDP. Its HO is in Basel, Switzerland.
In broad outline, the BIS pursues its mission by: fostering discussion
and facilitating collaboration among central banks; supporting
dialogue with other authorities that are responsible for promoting
financial stability; carrying out research and policy analysis on issues
of relevance for monetary and financial stability; acting as a prime
counterparty for central banks in their financial transactions; and
serving as an agent or trustee in connection with international
financial operations.
The customers of the BIS are central banks and international
organisations. As a bank, the BIS does not accept deposits from, or
provide financial services to, private individuals or corporate entities.

UNITED NATIONS CONFERENCE ON

TRADE AND DEVELOPMENT
UNCTAD, which is governed by its 194 member States, is the
United Nations body responsible for dealing with development
issues, particularly international trade the main driver of
development.
It produces often-innovative analyses that form the basis for
recommendations to economic policymakers. The aim is to
help them take informed decisions & promote the
macroeconomic policies best suited to ending global
economic inequalities & to generating people-centre
sustainable development.
In addition, UNCTAD offers direct technical assistance to
developing countries and countries with economies in transition,
helping them to build the capacities they need to become
equitably integrated into the global economy and improve the
well-being of their populations.

UNCTAD
UNCTAD holds a ministerial-level meeting every four
years to discuss major global economic issues and to
decide on its programme of work.
It also holds discussions with civil society, including at an
annual symposium where members of the public can
express their views and interact with country
representatives.
Every two years, UNCTAD organizes the World Investment
Forum, which brings together major players from the
international investment community to discuss
challenges and opportunities and to promote investment
policies and partnerships for sustainable development
and equitable growth.

REGIONAL INSTITUTIONS:
OPEC Organisation of the Petroleum Exporting Countries is a
permanent intergovernmental organization of 13 oil-exporting
developing nations that coordinates and unifies the petroleum
policies of its Member Countries.
NAFTA - The North American Free Trade Agreement (NAFTA) is a
comprehensive trade agreement that sets the rules of trade and
investment between Canada, the United States, and Mexico. Since
the agreement entered into force on January 1, 1994, NAFTA has
systematically eliminated most tariff and non-tariff barriers to free
trade and investment between the three NAFTA countries.
ASEAN The Association of Southeast Asian Nations, was established
on 8 August 1967 in Bangkok, Thailand, by the Founding Fathers,
namely Indonesia, Malaysia, Philippines, Singapore and Thailand. The
aim is to accelerate the economic growth, social progress and
cultural development in the region through joint endeavours in the
spirit of equality and partnership in order to strengthen the foundation
for a prosperous and peaceful community of Southeast Asian Nations.

GOVERNMENT INSTITUTIONS:
Governments act in various ways as actors in the
GFS , primarily through their finance ministries: they
pass the laws and regulations for financial markets,
and set the tax burden for all.
They also participate actively through discretionary
spending. They are closely tied to central banks
that issue government debt, set interest rates and
deposit requirements, and intervene in the foreign
exchange market.

OVERVIEW OF
FINANCIAL SERVICES

OVERVIEW
Fund based activities

Fee based activities

Leasing

Issue management

Hire purchase

Portfolio management

Discounting

Capital restructuring

Loans

Loan syndication

Venture Capital

Mergers and Acquisitions

Housing Finance

Corporate counselling

Factoring

Foreign collaborations

OTHER SERVICES

Insurance
Credit rating agencies
Stock broking companies
Commercial banks
Development finance institutions IDBI, SIDBI