Financial globalization has led to speculation and ruin in many parts of the globe. It occurs in a series of steps: first, multinational companies exploit customers and domestic competitors; second, they exert political influence and set unfair prices; third, they destabilize local economies and corrupt political systems. A fourth problem is that foreign investment can undervalue the currencies of poorer countries, slowing their development and potentially causing banking crises or recessions. Several contemporary examples illustrate these issues, such as the financial crises that struck Mexico, Indonesia, Argentina, Thailand, Japan, and Malaysia in the late 20th century. Recommendations include developing strong domestic policies, capping financial globalization, not giving all power to foreign investors,

1. Financial Globalization has brought speculation and ruinAakashGoswamiJigar JoshiNidhi JoshiPratikNegi

2. Financial GlobalizationPratikNegi- Overview of financial globalization and The big question

3. What is Globalization?Combination of economic, technological, Socioculturaland political forcesInternationalismIntegration of national economy into international economy through:Trade

4. FDI

5. Migration

6. Spread of technologyRoman and British Empire’s contribution

7. What is Financial Globalization?The liberalization of trade in financial assets.It is the flow of capital and corporate investments between various countries.World allocation of money leading to exchange of services and goods.

8. Financial CrisisStage 1: Severe fiscal imbalancesStage 2: Run up to the currency crisisStage 3: Currency crisisFinal stage: currency crisis triggers a full-fledged financial crisis

9. The big question is:Then why the financial globalization has failed in the major parts of the globe?

10. Financial GlobalizationNidhi Joshi- the ladder to speculation and ruin

11. 1st step-First mover advantagesAsymmetric trade and investmentExploitation on customers by means of increasing profitsAlso increases competition among the domestic service providers

12. 2nd step-Expropriation, unfair pricesRuins the common manPolitical risk involved with investmentThe prices set by the multinational companies is not set looking at the development index of the country but just from profit-making point of view

13. 3rd step-Economic and political interests of investor countriesDisproportionate shock on the local economy if the foreign investor withdraw his moneyDebt and exploitationCorrupts the political system of the country

14. 4th-Undervaluation of currency of poor countriesMismatch between the national policy and the economy of the domestic countrySlow growth in the development of the countryBanking panics or RecessionCheaper exports

15. Financial GlobalizationJigar Joshi- Contemporary Examples

16. Mexico Crisis, 1988Happened due to 1970s increase in petroleum pricesLax banking and corrupt practicesFailure in maintaining fixed exchange rateDevaluation was not handled correctlyMexico lost its image in terms of exporting its crude oil

17. Indonesian crisis, 1997Occurred due to improper free-floating exchange rate arrangementFalling of the rupiah in international market

18. Argentina crisis,Unable to pay the debt of loan in 1983 due to tumbling economyRise in inflationUnemploymentForeign companies moves outProblem in debt restructuring

19. Evolution of Argentine Gross National Product

20. Thailand crisis, 1997Failure to devalue bahtBankruptcy law was enforcedProblem with devaluationIts international trade became worse

21. Malaysian crisis, 1997Due to the devaluation of Thai baht, Malaysian ringgit was ‘attacked’ by speculatorsDowngrades on the stock and currency marketsThe ringgit fall to almost 50%The exit of new plans for its developmentThe first recession in the countryUnemployment

22. Japanese crisisAs foreign companies entered the market, the value and the price of the local goods fallThis resulted in to low consumption rateEstate bubbleThe prices of housing in Japan are still high

23. Total debts

24. Financial GlobalizationAakashGoswami – Conclusion and Recommendations

25. Financial globalization ‘dangerous’ success-Bubble-effectForeign Competition and thus rivalryBrain drainsThe shift of outsourcingThe investor on his wishes withdraws and then redeploysChances are given more to foreign companies. What about the domestic talent?

26. And the success is still rising…What about the national identification?Shifting production to low-wage economies and thus we jump into the ‘race to bottom’Due to language barriers, time also increases in solving an issueFear of debt