Globalization, is often associated with the notion of «international financial integration» it’s a controversial term, some people regard as benefactress to the world economy and some other are qualifying it as «anarchy leading to disequilibrium»; This notion is also a polysemic term, that is to say which has many definitionsand we will see that it will generate many upheavals in the world.
That mutation is linked to the technological revolution occurred in the 80's on the field of information and telecommunications and which has upset the distances, making it possible for companies to position themselves on a planetary scale. Thus, the main dimensions of the globalization phenomenon are the growth of internationaltrades and the boom of the Foreign Direct Investment (FDI).
So the globalization is a shift caused by the Liberal revival and triumph of the Market economy:
Now, the liberalism takes the top on the public interventionism, all areas are subject to the market law and shareholders will see their power grow at the expense of those of the managers.
But in which context the concept of globalizationwills it emerges, what will be the consequences of this phenomenon on the national governments’ economic policies and how this new system will he becomes a factor of instability for the global economy?
International financial globalization is characterized by the «3D»:
• Deregulation: The monetary authorities of major industrial countries have undertaken from the 80 in the process ofabolishing national regulations regarding international flow of money. The financial regulations are becoming increasingly flexible. Barriers that hindered the international flow of capital have been abolished as well as all the quantitative restrictions on loans and interest rates. Regulations limiting banks' commitments have also been removed, but by imposing a minimum capital. This deregulation hasalso helped to adapt the organization of financial markets to new tools of financial innovation.
• Decompartmentalization: This opening-up has meant the removal of borders between different national and international financial markets, and between the different compartments of the financial markets. These compartments are subsets of a financial market which has became global and unified.• Disintermediation: that is the opposite of banking intermediation. Banking intermediation was the privilege that was granted to credit institutions to receive deposits and convert them into credits. By contrast, the Banking disintermediation refers to the various measures of deregulation and deregulation of financial activities that have enabled some companies to obtain financial resourceswithout going through banks, but by issuing securities.
So, the Globalization is characterized by the creation of a single and global market.
• A global market in the time, because financial markets works 24/24 hours and 7/7 days due to the Simultaneity of the opening and closing of various international financial centers.
• A geographically global market, because allfinancial centers are interconnected through the Information and communication technologies (ICT).
But all these elements that characterize the globalization are not entirely correct.
We speak about deregulation, but ultimately it’s rather a remodeling of the regulations, where standards of behavior and separation of risks have been strengthened.
We speak about disintermediation but for animportant part, the economic activity continues to be financed by the intermediary. Moreover, beside the classical intermediation, a new form of market intermediation appears. It consists for the banks to the junction between suppliers and seekers of capital. We are speaking about brokerage and Trading.
We finally speak about decompartmentalization, and this is by this term that globalization is...