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Finance in a Global Context, Global Finance for TMA 02- shaping business,…
Finance in a Global Context
Economic and financial
flows
Balance of payments track transactions all over the world
FDI's are investments by companies to produce or sell in foreign countries
International financial institutions
International monetary fund
Competitive devaluations are made by countries
To reduce exchange rate to make exports cheaper
Gives them Advantage
primary purpose to ensure stability of the international monetary system
Created by countries for economic cooperation
Created by UN in 1944
The World Bank
made up of 189 member countries
These are policy makers at The World Banks
Also created in 1944
Set 2 Goals By 2030
end extreme poverty by decreasing the percentage of people living on less than US$1.90 a day to no more than 3%
promote shared prosperity by fostering the income growth of the bottom 40% for every country.
International Tax reporting
Introduced to try and prevent more financial crisis
requires organisations to report on all parts of business
The Financial Crisis
economic and financial crisis threatened basic structures of many systems
Multinationals
They have increased amount of power
Provides innovative products like Phones and cars
organisations are trading in many countries
Exchange rates
Falling Pound makes it cheaper to export
More expensive to import
Valuation of currency affected by recession
Financial Crisis caused pound to drop
Financial Regulation
Financial reporting changed to be understood globaly
designed by the International Financial Reporting Standards Foundation (IFRS)
All organisations in EU must comply with IFRS standards
