Factors affecting Globalisation Flashcards
what are Financial systems
Financial systems are based on companies called investment banks. The main role of investment banks is to help companies raise capital by selling shares on behalf of those companies.
Factors that made financial systems more global
Governments around the world undertook a process called financial deregulation, where they relaxed rules about what banks were allowed to do. Financial deregulation included allowing banks to charge people more for their services, as well as letting banks invest in a greater range of businesses.
Financial deregulation also involved removing barriers to capital coming in and out of a countrymaking it easier for investment banks to buy and sell shares and other products across the world.
What is trade
Trade is primarily regulated by countries governments, who control which products they let into the country and at what price. Controls include tariffs (taxes on products coming into the country), non-tariff barriers (e.g. rules on the quality of products coming into the country) and the banning of certain products(.e.g., illegal drugs.
Controls make it more expensive for companies to sell their products abroad, as well as for consumers to buy them
What are trade agreements
Trade agreements act like contracts country agrees to remove controls in exchange for the other country doing so. This benefits both country’s companies and consumers.
