What is the beginning of Finance ruling our world?
First of all, man realized the importance of trade long time from now. Thereafter trade began with money and finance.
Above all, this necessitated a medium of exchange and transit from barter economy. Also, this transition necessitated a currency called money. Most noteworthy is different countries have different currencies along with regulatory body for eg RBI in India.
What is a regulatory body? What are their roles in finance ruling our world?
Similarly ,every country have their own regulatory agency or bank. A governmental body created by legislature to execute ,enforce and implement certain laws.
First of all, bank regulation involves two steps 1. Licensing 2. Supervising.
Furthermore licensing is regulatory guidelines as per bank’s operation, financial soundness, managerial action . Moreover, supervision is ensuring that functioning of bank complies with regulatory guidelines and monitoring possible deviation from regulatory standards . Eg. Federal Reserve System ,Federal Deposit Insurance Corporation in US, Federal Conduct Authority , Federal Regulatory Authority in UK etc.
How money/finance ruling the world came into existence ?
It seems money invented as a medium of Exchange after immense struggle. Possibly, money is the road to all financial transactions . Furthermore, a person’s measure is money. Still, whether money or finance will rule our world is doubtful.
Lately bitcoin, cryptocurrency emerged. Certainly the main role of money is exchange medium. conversion of bitcoin to euros or dollars is possible.
DEFINITION OF WEALTH?
First of all,in earlier times in India a ruler portray his power in his own territory with his estates and Jagir. Furthermore, the strength of his defense forces, arms & ammunition, vastness of territory pictures his exact power to his rival kingdom. Moreover,the valued possessions, vastness of territory , unity etc reflected his authority to his neighboring kingdoms
Once upon a time India had 565 princely states ruled by kings/rulers. The major criteria to prove that the ruler was affluent & powerful was size of his kingdom in all aspects.
comparison of curencies
Probably, country’s currency is compared with another country’s currency. RBI HAS DEVALUED RUPEE AGAINST DOLLAR.
So,economists say this situation of currency getting devalued is because of several factors. The main reason which contribute to currency’s valuation is demand & supply of currency . will finance ever rule our world is question unanswered.
First of all on account of exports of products abroad the value of currency increases. Furthermore, in the reverse situation value of currency decreases. So money supply will be more than demand because RBI has issued lot of money. May be if a State earns more than it earns on taxes, then state issue more money to pay for deficit. Finally to prevent currency devaluation, lower down public debt. Above all,high interest rates , raising incomes will prevent devaluation. Therefore high interest rates will attract NRI and foreign investors to deposit in our country. Finally,this way investors will buy our currency and our currency will appreciate.
How does Governments derive their economic power?
Governments derive their economic power from 4 key sources
- Print money 2.Issue 3. Taxation 4. Borrow
First of all,they hold monopoly in three areas. Furthermore in borrowing they print money to repay debts, certainly, when debts become onerous. Similarly open financial markets threaten future objectives. Another,large financial players, individual citizens have the option to switch over to other tax regions with ease.
So, U.S. Government is waging a global war against its citizens to gain control over their taxable income. While, European nations are slow to give up their own taxation privileges.
Description of economic power
For the reason that printing money is the legal privilege and monopoly of Governments but currency soundness standards are strict. As a result, linking weak currency with stronger currency is done. LINKING OF PESO TO DOLLAR IS AN EXAMPLE.will finance ever rule our world is question till today?
what are the hurdles for regulation of financial markets?
Above all,openness of borders, difficulty in defining of territory which exists virtually are hurdles for regulation of financial markets. So all Governments can come together and establish global regulation. Even more individual governments should enforce minimum capital standards for internationalbanking.
Most noteworthy is the regulators are preserving a system which they are not thoroughly controlling.
Furthermore the governments have immense control to change the markets with their policy moves. Even the financial authorities show how the markets reacts to their moves. So then one may wonder who is in charge. WILL FINANCE EVER RULE OUR WORLD?
How did uncertainty of finance appear?
Similarly the 1987 Stock market crash, 1994 bond market crash have made markets uncertain. Furthermore,changes in political scenario in any part of the world, natural calamities created volatility in markets. Finally this has resulted in Government versus market struggle. Certainly good governance and sound economic management of governments of the world can deter this world from entering into economic crisis.
finally market regulatory bodies independence depends on Political or other situations in any part of the world. Even more now the question is will finance ever rule our world? So, till this situation improves, Money /Finance ruling the world is only a dream.Probably Money /Finance can rule our mind but not this world.
You can also read Is money evil or vice
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