FINANCIAL GLOBALIZATION AND ECONOMIC DYNAMICS.

Author:Ciurlau, Florin Cristian
Position::Report
 
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  1. Introduction

    Globalisation is one of the major phenomena facing the contemporary world and dominate over the entire human existence; globalization, regionalization, prefaced by affecting the entire planet, all states, regardless of their level of economic development and political and ideological regime and social and economic. Mondialisation and globalization are two terms extremely close, but when referring to finances, the financial-banking sector is more globalization than mondialisation (Mihai, 2015).

    Globalization is a plurivalent concept, theoretical expression of a gradual process and oscillating, accepted or contested due to its implications, considered with deep roots in the more distant past of mankind, as well as a more recent phenomenon, globalization, manifests itself under various facets on different steps and in certain stages of social evolution. The specialized literature identifies, justified in our view, a number of significant milestones in the evolution of specific thinking on this issue (Giddens, 1985; Harvey, 1989; Lash and Urry, 1994; Robertson, 1994).

    The unrelenting character of globalization in the modern world, and that the economic sector most sensitive to this phenomenon is the financial and banking activity are undeniable. The two areas of activity (financial and banking) do not overlap, they are not one and the same thing, but neither one can be delimited strictly; there are components of the banking activity with financial character but also components of actual financial activity which are carried out through banking institutions (each of the two areas of activity shall exceed the traditional area of the show--they are interwoven to such an extent that they currently speak of a financial-banking sector).

    The impact on the evolution of banks' economic and social overview has been manifested since their inception. This impact has been mostly positive as long as banks have fulfilled their traditional role--in fact, only the prospect of a positive impact in a decisive manner contributed to the organization of these institutions. With time, the banks have been removed from their natural functions and were involved in more sophisticated operations and insufficiently mastered by them, especially under the impetus of the change of the ratio of actual flows and money flows from the contemporary competitive economies/savings of money and time of the explosive character of the innovations in the field of so-called financial engineers (derivatives provided have lost touch with progressive real assets which should represent them). Banking crises have been propagated quickly and led to dysfunctions in all sectors of economic and social life at the national and international level (Reinhart and Rogoff, 2012).

  2. Global Financial Crises and Systemic Risk

    Financial markets and the banking sector hold forefront radical transformations that characterize the contemporary world. Financial markets and banking institutions involved in their operations are the most open to the process of globalization, but also the land most conducive to triggering imbalances with notable adverse effects and with significant force propagation of the mechanisms by which they have been triggered. Banks, although other object than strictly financial institutions, are at the epicenter of the outbreak and spread of the global financial crisis the central place they occupies in the operating mechanisms of contemporary economies. There are of course differences from state to state.

    In the last decade of the last century, the Governments of major powers-which had to overcome the aftermath of the real estate crisis of that era, and major financial institutions-seeking new areas of expansion, have jointly developed a doctrine called "Washington Consensus"--through the International Monetary Fund (IMF) and had tried to persuade the Governments of the States in the development of the former centrally planned economies to adopt as soon as possible the solution of financial liberalization considered the "Royal route" of structural solutions for the purpose of economy of the monetary exchange type. Those States which have responded promptly to this request have been labeled as "emerging markets." They immediately entered the attention of large international financial intermediaries for the purposes of the financial optimistic arrangements and have attracted a veritable avalanche of capital. Herein lies the origin of the particularly serious financial crises following the great depression. They appeared, one by one, new outbreaks of violent crisis with far-reaching international repercussions: Mexico--early 1995, Asia--half of the year 1997, Russia--in August 1998, Brazil--at the end of 1998 (Aglietta, 2001; Greenspan, 2008), and the enumeration is likely to continue.

    These phenomena raise very serious issues concerning the global economy impact of threat; bank failures or market crises may lead to deepening or lengthening the recession, or can create a pessimistic climate of affairs, preserving post-recessionist morass; in short, local implications, can lead to depression in the economy in full--in this sense one can talk about the risk of the system.

    The most rapid ways of spreading the risk system are liquidity crises-they can be found at the level (liquidation or discontinuation of interbank deposits of commitments), or at the level of markets (contagious reports, between markets, of the surplus sales when there was a crisis of valorization on one of the markets). Credit crises, derived from undercutting private risks and risks of excessive indebtedness, are characterized by slower incidences with clutter, but sometimes more insidious is the real economy of Japan during the 1990s. The...

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