Globalization Of Global Banking

The banking system worldwide has faced many transformations in last few decades. There is a range of changes from banking regulation, advancement in banking information technology, development of economies, opening and collaboration of global financial institutions and financial markets. Though, all these changes and advancements in the global banking system created opportunities, the challenges are also enhanced and competitiveness exerting pressure on the global banking system. In this report we’ll determine the different aspects of banking globalization and its effects on local as well as global economy.

Introduction:

The activities which are being conducted in the local business arena are highly influenced by the activities conducted in global system. In these days the banking and all other business industries have transformed to less face-to-face interaction with their clients. This transformation became possible only due to highly intense and sophisticated information technology. For instance, you’re at home, you don’t move to any bank to withdraw the money neither go to the shop for pizza, you just order it online by giving Credit Card number and the Pizza would be at your door step.

There are still some limitations with the global banking system. But the World Bank, European Union and European Central Bank are continuously trying to regulate this system effectively in the betterment of world economy.

A major aspect to be discussed here is the contribution of Multinational Organizations in this system, according to sources, 33% of World’s output is being generated by the multinational organizations and there is almost 66% portion of all world trade that multinational organizations cover.

Economic Effect of Globalizatio...

... middle of paper ...

...y increasing competitiveness. In addition to this, the currency crises, in the same situation, would increase the competitiveness along with the higher efficiency.

Domestic borrowing, for instance, local bank obtain funds from abroad in a commonly established currency i.e. Dollar, to ensure the lender about the value of his investment, so the impact here of financial globalization on the domestic financial fragility is not that easy to determine. The better way is the Foreign Direct Investments that shortens the period of borrowing and reduces the chances of banking crises.

So, in this high-tech information technological competitive global banking market, the banks must understand the market needs to comply with, they must ensure their goals are being achieved, they must know what their competitors are doing and how they are penetrating the market so survive in