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Global Financial Market

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In the past three years, U.S. financial market has been rising by contribution from global
financial market. But the debate for financial stability is long going even after so much time has
passed since the financial crisis. The stability risk has risen as the interest rates and exchange
rates are moving rapidly. U.S. stock market has risen over 200% since 2009 lows and job
markets are also getting strong. Although apart from rise in approximately every financial market
in U.S. the bond market is suffering as it has fallen since 2014 which suggests that there is a
stress in that market. Although there is no proper justification for the fall but it is expected that
the market for bond will rise again soon. Since 2012, the U.S. financial market has seen smooth
sailing till now with little ups and downs. International trading and foreign exchange seems to be
the strongest forte as the currency of United States is getting stronger as it had significant impact
on U.S. economy. Even in the currency tug of war between euro and dollar, experts suggest that
dollar would be soon worth more than Euro (Brien, 2015). The investors are switching to dollar
rather than buying other currencies as it is predicted that euro will fall to 85 cents till 2017.
A large global financial market would perform various functions such as:
Aiding in balanced economic growth
Financing companies in capital market
Facilitating risk transfer in derivatives market
Aiding in international trade and commerce
Facilitating liquidity in order to help in trading funds
Credit creation
Intermediary functions
These are few major functions which a large global financial market would perform and apart
from these functions there are numerous other functions which need to be performed by them. A
financial market is expected to work in favor of the economy while calculating the risks and
opportunities of the economy. A financial market of a very large capacity would be responsible
to maintain the balance in all the economies and provide financial support to them while making
new investment opportunities. Being a large global financial market it would be their role to
provide finances to the businesses on a global scale and also assist to lower the negative impact
from global economy.
Reference
O’Brien, M. (2015). This is historic: The dollar will soon be worth more than the euro. Retrieved
from: http://www.washingtonpost.com/blogs/wonkblog/wp/2015/03/10/at-this-rate-it-wont-be-
long-before-the-dollar-is-worth-more-than-the-euro/

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In the past three years, U.S. financial market has been rising by contribution from global financial market. But the debate for financial stability is long going even after so much time has passed since the financial crisis. The stability risk has risen as the interest rates and exchange rates are m ...
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