MODULE 3 – Banking Systems in Industrial Economies, OECD and Emerging
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.
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.
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
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
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.
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
Most of these nations receive economic development aid from the World Bank (WB)