International Financial Markets

Topic: Finance
Words: 567 Pages: 2

The international financial market is the sphere of the sale of financial assets and the relations between participants in transactions with these assets at the international level. In recent decades, it has been widely developed and now plays a leading role in the international economic system’s functioning. The financial market contributes to the more rational use of resources around the world, as well as to the deepening of specializations in international production.

The main functions of the international financial market are the mobilization and redistribution of accumulated capital between national economies, the formation of market prices under the influence of supply and demand, and the reduction of financial transaction costs. The financial market also accelerates the concentration and centralization of capital (Mosteanu 125). The international financial market subjects are global commercial institutions that ensure their effective functioning, unite the disparate entities of the national economy, and mediate their interaction.

The first article under examination is International Financial Markets Face to Face with Artificial Intelligence and Digital Era, written by Narcisa R. Mosteanu. It was published in the journal “Theoretical and Applied Economics” in 2019. This article examines the importance of financial markets for the modern economy. A study which identified the causes of inequality in developing financial markets in different countries was conducted. The first reason is the economic and social conditions of regional development, and the second one is the level of implementation of artificial intelligence and digital finance (Mosteanu 128). The article describes such positive aspects of artificial intelligence as the combination of financial information and technical capabilities, as well as the acceleration of the digital transformation of finance. The latter contributes to the creation of a safer economic environment and reduces the possibility of human error. The article also shows that artificial intelligence helps the modern financial market move to a new level of development and provides the opportunity to conduct financial services and transfers using the blockchain’s digital financial system.

The second chosen article is Financial Markets Under the Global Pandemic of COVID-19 by Dayong Zhang, Min Hu, and Qiang Ji. It was published in 2020 by the journal “Finance Research Letters.” The authors examine the current topic of effect of the global coronavirus pandemic on the international financial market. The primary purpose of the study is to consider the risks that can affect the operation of financial markets and their country and system patterns. The authors discuss the significant risks associated with the spread of the disease, which led to a general lockdown (Zhang et al. 3). In addition to considering the possible dangers, the article also analyzes the possible consequences of political interventions, such as the US decision to introduce a zero interest rate and unlimited quantitative easing (Zhang et al. 3). Thus, the authors consider how other areas of life can affect the formation of uncertainty in the global financial markets.

In recent decades, the international financial market has developed widely and now plays a leading role in the functioning of the international economic system. It contributes to the more rational use of resources worldwide and leads to the formation of new forms of cooperation between countries, including at the financial level. The study of possible risks due to the situation in society, and the causes of inequality resulting from differences in economic and social development, helps to find ways for the more efficient functioning of the international financial market.

Works Cited

Mosteanu, Narcisa R. “International Financial Markets face to face with Artificial Intelligence and Digital Era.” Theoretical and Applied Economics, vol. 26, no. 3, 2019, pp. 123-134. Web.

Zhang, Dayong, et al. “Financial markets under the global pandemic of COVID-19.” Finance Research Letters, vol. 36, 2020, pp. 1-6. ScienceDirect. 

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