International Finance and constraints in the Iraqi banking sector .. The causes and
International Finance and constraints in the Iraqi banking sector .. The causes and treatments
1 financial globalization and its role in the system of domination
Financial market economy:
Financial globalization is a phenomenon dictated by recent economic developments towards activating financial activity, and ensure a better allocation of capital and freedom of movement between different regions and sectors of activity across all of the globe points as the market is one in which all forms of geographical and regulatory restrictions are no longer, in the hope of collecting profits from the market transcend national boundaries associated with minimization of risk levels.
Two may differ from the amount of the impact of globalization on the financial system in the various economies, as tended Gelha- Whether it is the developed economies or developing - to rely on the financial market to assemble the financing requirements for companies or governments, Amadvia by a high degree of sophistication and efficiency given the size of the deal and depth, and the high level of its technology, and in the framework of the free movement of money taking the financial market trend towards global capital financed by virtue of multinational companies that are active in many countries, it has been to ensure this funding through:
1-1 integrative developed financial markets and the growing links between them:
It allowed to provide the best avenues for savers to employ their surpluses and investors to meet their needs on a global market scale When an investor is needed to finance it Safadil between asylum to foreign bank provides him that the loan at a lower cost compared to local banks or he serves on the issuance of securities in the form of shares or bonds or in the form of any other product in the national financial or international market, in line with the level of satisfaction for the benefits on the one hand and the levels of risk associated, and this is what happened to the company Tennessee Valley Authority, which has issued bonds in the amount of $ 6 million in the international markets, and entrusted version task Lehman Brothrs international's and Deutsche Bank, and the same thing for syndication at the international level as it found that the pension funds in the United States in 1995 had hired a large part of their savings in the global market outside the United States, accounting for 7-8% of the financial portfolio in% 1994.
1 2 global trading and allow the circulation of securities of various foreign companies:
Has been canceled a lot of barriers and restrictions that separate the domestic and international financial markets and make way for foreign traders to deal in securities in the domestic stock markets, and the liberalization of securities denominated trading in foreign currencies in the domestic financial markets, and it was for this liberation good effect to serve the integration of global financial markets path . To ensure the provision of this service has been building electronic networks and wide to allow automatic linking markets in the United States, we find network NASDAK In the UK system SEAQ and allow these services enough in real time data on various other markets, so as to ensure harmony and balance global markets, and provide customers the possibility to complete deals 24 hours
1-3 - amendments to the exchange-traded financial instruments and investment portfolios:
Valaadaat contributed to the emergence of a variety of new financial instruments along with traditional financial instruments, made up by financial derivatives (it is derived from stocks, bonds) in unmarked markets in futures and options contracts and swap contracts markets, these markets provide investors with more room for the prevention of the risk that the stock price Finance Tzbdbat because of interest rates and exchange rates, and provide fertile ground for speculators to make profits. Amounts of derivative financial instruments has increased in markets structured and unstructured than 540 billion dollars in 1990 to 27 200 billion dollars in 1995, thus forming this way to facilitate the movement of capital in the world tools.
2 - the driving forces of the globalization of finance
Currents of globalization has imposed a continuous and rapid growth in the role of financial markets; markets operate on an ongoing basis, taking its way to the evolution driven by the following factors: (a) - creativity in the financial and banking industry, and this growth has increased since the seventies after the innovation of financial derivatives as one of the most important aspects of financial innovation that support growth Trading volume.
(B) increase the number of companies that are active in the financial intermediation, steady growth of the banking activity under penalty of a tight domestic market, in the context of widening Activity banking intermediation grew intense competition among themselves and necessitated by increased efforts to provide more financial and monetary products that respond to the requests of dealers from investors or savers , while a narrow domestic market with weak economic growth or slowing the form of a real constraint The decrease in bank brokerage earnings, Vlzimha is the need to reduce the unit restriction imposed on it, and get out so the local level to the global markets in search of diversification of activity in and out of the base specialization and become banks tend to the development of an international strategy determines where this trend and to a large degree career options and constitute its future.
C-mile-bank financial intermediaries to a comprehensive financing activities Kkiemha operations leasing finance, insurance, banking and engage in financial market activity particular branch, or the creation of a new department in the bank to secure the activities of non-traditional service as well as its tendency to take advantage of capital inflows, which reached the year 2000 to 7.5 trillion dollars, which constitute resources can work on attracting share them for usefulness in the form of deposits they'll Bank significant amount of resources that can be directed to the areas of effective activity and be able to avoid the competition the size of which has become faced by many other financial institutions as banks investment, and in the midst of this competition down For example, the number of US banks 30,000 Bank in 1920 to 11,000 bank in 1995 and the growing trend to reduce the number working in the activity of banks and resulted in the truth about the entry of banks in activities unrelated to financial intermediation an attempt to seize the opportunities offered by the financial market activity through the possibility of transfer of assets to securities traded, and trade-offs for interest rates in order to avoid credit risks, and raise the rates of return for the benefit of the bank owners to strengthen the confidence of equity campaign, especially since Brokerage non-banking has become a constraint a real to them, they are closing in on the resources available to the banks through assembled to surpluses cash from families or business sector has allowed it to achieve relatively high rates of return.
(D) the huge growth of multinationals: the population reached 40,000 company in the late nineties after the 7000 company in the sixties, it has contributed to these companies in a bind and activate the financial markets for higher-level view of the breadth of its activities which are in need of a very large sources of funding, and generated so huge revenue maker kinetics tide of islands in capital flows at the global level, it controls a great deal of capital flows, this fact has recalled the existence of a international activity provides them with the necessary banking services that you need in different presence points, especially that multinationals Bank in the financial relationship to require huge financial resources, which makes it imperative for the bank that deals with it to be in the technology could even find its aspiration and thus the bank of heavy standard in the level of services and its ability to put together funds from various points in the world so that it can be at the level of their aspirations and responds to their level of development at Each point of presence points.
E -alnmo massive and steady information and communication technology and the evolution of the use of computers and the increased use of the Internet most of the global markets and linked in the World Wide Web leaves flexibility to adapt this area to further deepen the globalization of financial markets, and the availability of this advanced technology a constant flow of information to all who need in time and space allowing assessment of the situation Alosouk, and study opportunities and risk monitoring, analysis and forecast future trends so that you can manage.
So has the globalization of financial markets and one of the salient features of the phenomenon of globalization has become in, and in the midst, we find globalization Activity seeking international diversification portfolio that be allowed. Have to maximize profits and minimize the level of risk to a minimum, according to the logic of diversification theory, as we also find globalization Activity financial and banking institutions as each party continues to be a driving force to create a trend towards more globalization of stock markets and the globalization of the securities and the globalization of financial intermediation, especially with the growing trend towards the standardization of methods of dealing in financial markets from the registry to trading with the need to provide a measure of financial data service to the goal of financial transparency activity disclosure in order to avoid the occurrence of bottlenecks in the market due to lack of information and support of financial stability.
-1 Positive effects of international finance
Access to sustainable development means enduring stability in the rate of economic growth, and this requires access to other stable funding financial resources are, and the longer foreign investment flows and one of the funding sources that have increased their importance in the past two decades, but it has produced positive effects in some countries and the effects negative in other countries, but also reinforced the instability factors, and created problems and crises, how can understand this situation?
Theory destinations have varied in its analysis of the relationship between the volume of foreign direct investment flows and economic growth; sees Alnyuklasek that the benefits arising gel in the wake of IDE flow for the benefit of foreign investors in particular excludes the benefit of the recipient country, and this outlook based on the following rationale:
- Could create a situation of competition unequal between local and foreign companies that could lead to deportation of circuit activity, leaving behind serious consequences for the local investment and saving size, as well as on it by these projects to transfer a certain amount of financial surpluses to invest in other countries, a What a negative impact on economic growth in the host country.
A: shrinking the availability of local volume of loans for the benefit of local companies due to a lack of domestic savings with the lack of size of the foreign investment necessary flows for the project, and meet the needs of the latter relying on bottled from the local money market loans as it can be a stumbling block in the path of the growth of local companies due to high the cost of funding that would be exposed.
B: consecration dependency recipient country of the exporting country by the technological state of the link, and another link for exports and imports with the exporting country, as the host for the disposal of the company's products market nation and supplier of raw materials for the country. But this view did not find justifiable from reality on the ground as with shrinking the size of the financial resources available to developing countries in the past three decades, the trend towards attracting this kind of flows has become an issue that can not be reversible, especially since many studies have proven the effectiveness of this type of flow the service of development path, was internal growth models dedicated to the direction of the interpreter of the impact of funding on growth in terms of the existence of a common interest draw the attention of all parties concerned, Vhakl competition requires the presence of two parties each may get benefits and may cause one of them losses, according to the logic of game theory, relationship exists between the country Host and foreign investor relationship governed by mutual common interest and the amount of benefit each specific party responses do and strategies of the other party, has this view stressed the importance of funding to bridge the gap relating to: 1 savings gap: helping finance flows to increase the estimated export of the country, and this is what will raise the level of income that will leave a positive impact on increasing domestic savings, which is used to finance domestic investment, thus contributing profits in new investments to increase tax revenues Viazz size of government savings level of the host country to settle the matter to reduce the deficit level to finance domestic investment.
2 - foreign currency gap: Increasing funding flows will allow the occurrence of an initial increase due to the conversion or transfer of a share of the amount of the initial flow and then start another flows appear as a result of increasing the volume of exports as one of the most important sources to increase the volume of international reserves can also be realized in the wake of an increase in the export of goods were the subject of import before entering the funding or the so-called process of import substitution, addition, we find that funding can bring many advantages for the benefit of the host country as it will increase the volume of its exports due to the correlation of the host imports the country of the company the country's exports mother with reducing the import bill due to the companies multinational production of goods was import shop which will enhance the competitiveness of the country and supports the international balance of payments position, allowing to stop the pressure on prices tend to stabilize the rate of inflation and reduced to reasonable limits and is among the goals that you want all the economies achieved, and may generate this stability further polarization funding, as can the flows of foreign direct investment that contributes to the transfer of technology and production requirements which will support the level of competition in the host country between national companies incentive to develop their capacity and raise the efficiency of the conduct of its resources tradition to the level of the performance of multinational companies, supports this trend towards research and development activities Development various fields, allowing an increase of new knowledge size that would contribute to the innovation of new products and improve the quality of existing products, and is usually accompanied by funding flows flows of technical and human experience is done on human capital efficiency in the host country due to the necessary training for the workers in order to run projects of multinational companies , and then rise in factor productivity in the host country is achieved.