Lecture 8 POLS2402 (Global Finance)

Lecture 8 POLS2402 (Global Finance) - Global Finance and...

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Global Finance and Financial Institutions Howard Guille September 2011 1 Howard Guille
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Rogue trader weeps over $2b loss Trade CFDs your own way The timing of the discovery of what UBS has described as ''unauthorised trading'' has mesmerised the City, as it coincided with the third anniversary of the collapse of Lehman Brothers. You've never seen a CFD trading platform like it. We've purpose built the CMC Tracker platform from the bottom up to make CFD trading easier and give you more control than ever. Investing in CFDs carries significant risks and is not suitable for all investors. You could lose substantially more 2 Howard Guille September 2011
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The theme Howard Guille September 2011 3 Describing money, currency & finance The abolition of national controls on money and finance The subordination (by the surrender of power) of national economic policy and management Finance (and financiers & financial markets) as global arbitrators The transformation of the functions of the Bretton Woods International financial institutions The use of “Structural Adjustment” to promote neo-liberal policies
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What is money & finance Howard Guille September 2011 4 Money is all of the following and all at the same time Means of exchange (means of buying & selling goods and services) Measure of value of a commodity Store of value/wealth Source of liquidity (- i.e. for precautionary purposes) A commodity that can be bought and sold (i.e. for speculative purposes) Moreover, 'money' is available as tangible notes and coins and 'book' or symbolic transactions (e.g. eftpos, credit cards),
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Money as national legal tender? Howard Guille September 2011 5 Money consists of tangible movable objects that have been issued by or under the authority of the state and are the universal means of exchange in jurisdictions under the authority of the state. ( Akindeowo UNSW Law Journal 21,2, 1998) But most global finance is electronic & virtual and created by ‘private’ agents is not under the authority of a national state or backed by a state agency or central (reserve) bank and some currencies (esp $US) are usable in many countries and the $US is the national currency of the world's newest country Timor Leste
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