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Explain the meaning of the term globalisation and identify its benefits and costs. How and why will it affect banks' staff, their owners, their depositors, and their borrowers?

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Introduction

Explain the meaning of the term globalisation and identify its benefits and costs. How and why will it affect banks' staff, their owners, their depositors, and their borrowers? The meaning of the word globalisation has been explored by many scholars, leading to a strong controversy. Despite the existence of different views and theories on the term globalisation, there's a broad agreement that although globalisation may be a much debated topic, there's no argument from the view that we live in a period of globalisation. Globalisation refers to the ongoing global trend towards the freer flow of trade and investment across borders which results in integration of the international economy. This interdependence of buyers and sellers in countries around the world results due to a number of factors. Mainly the maturation of the Eurocurrency markets since the 1960s, desire by financial institutions to expand their lending and other activities outside geographic boundaries and desire to control balance sheet risk through Interest Rate Swaps and other financial swap agreements. ...read more.

Middle

Globalisation also leads to an increased liquidity of capital allowing investors in developed nations to invest in developing countries. Lastly, the immigration and emigration of people causes cultures and communities to spread all over the world which is a way of diversity being created. We should not underestimate the costs related to globalisation. I will now talk about them. Due to globalisation, there are more chances of economic disruptions in one country affecting other countries as they may be reliant on them for a certain commodity. Also there's a great risk of diseases being transmitted unintentionally between nations. Most importantly, there's a big chance of globalisation being violent in an attempt to preserve cultural heritage because multinationals may bring in their cultures and customs changing the historic culture in that country. There are more chances of civil war within developing countries and open war between developing countries as they compete for resources due to there being demand for a materialistic lifestyle and an attitude within the population that sees consumption as the path to prosperity. ...read more.

Conclusion

and governments are tempted to loosen domestic rules to gain advantage are focused on refining the rules on capital requirements, on increasing disclosure and on improving international cooperation (Vaitilingham,2006). So to conclude, it is clear that the world is becoming more and more globalised. Globalisation is a man made feature of our world and it is unlikely that it will stop or slow down in the foreseeable future. Globalisation may lead to a compression of the world and an intensification of consequences of the world as a whole but the benefits surely outweigh the costs as otherwise it would not have existed as long as it has. Globalisation is a process of interaction and integration among the people, companies, and the governments of different nations, a process driven by international trade and investment and aided by information technology; this process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well being in societies around the world. 972 words. ...read more.

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