pdfLecture chapter 3 int banking

pdfLecture chapter 3 int banking - MODULE 3 Banking Systems...

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1 MODULE 3 – Banking Systems in Industrial Economies, OECD and Emerging Markets Introduction Emerging market societies are the focal point of the globalization process, thus our focal point in this module is to describe the role that they play in this endeavor. The role of the G8 and Organisation for Economic Co-operation and Development (OECD) nations will be elaborated upon. We will examine the role of multinational banking in various industrial nations and how it evolved, and the economic interdependencies that exist among those nations in formulating their banking governance. Objectives Upon successful completion of this module, the student should be able to: • Examine the creation of an OECD country and its purposes. • Identify the differences between traditional banking and universal banking. • Describe the banking system in many societies with different value systems, cultures and political agendas, and their role in the globalization process. A ccording to Antoine Van Agtimal, an economist from the World Bank, emerging markets, also known as developing markets, are those economic systems whose performance is ranked from low to middle per capita income. Based on these statistics, almost 80% of the world’s population is represented in emerging market societies. Because of globalization, emerging market economies are dynamic and in a state of constant change. International trade through globalization facilitated emerging market societies in transforming from closed economies into open economies. Consequently, many aspects of the financial and economic system had to be changed to accommodate global transactions. To name a few, accounting standards, product safety, and exchange rate based on the political and economic condition of the nation, rather than central banking’s interference. For further information, please see Footnote #1 . The political vocabulary identifying third world countries comes from the notion that there are three different economic societies: 1) industrial economies that are considered capitalistic economies, such as the US/Canada, Western Europe, Japan, Australia are considered one economic system; 2) industrial economies that are not considered capitalistic economies, such as the Soviet Union, China, Eastern Europe are another economic system; and 3) the nations that are neither, such as Latin America, Africa (not including South Africa), the Middle East and most of Asia. The latter societies became known as third world countries. Later on, to be politically correct, they were named “under-developed nations” (they didn’t like that either), and eventually they became known as “developing nations/emerging markets.” Of course, there are degrees of development, based upon gross domestic products among these nations. For example, Haiti is a developing nation, and so is Argentina. However, Argentina’s economic activity is much greater than Haiti’s. Most of these nations receive economic development aid from the World Bank (WB)
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This note was uploaded on 11/06/2011 for the course FIN 4634 taught by Professor Badet during the Fall '09 term at FIU.

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pdfLecture chapter 3 int banking - MODULE 3 Banking Systems...

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