Flashcards: Global Financial Integration and Crises — 22 cards

Financial globalization — definition?

Integration of domestic markets into global markets.

Key features of financial globalization?

Free capital movement, global financial services, interdependence.

Historical waves of integration — example?

Gold standard era, Bretton Woods, post-1980s liberalization.

MSCI classification — dimensions?

Development level, size/liquidity, accessibility.

Market accessibility pillars?

Ownership openness, capital flow ease, operational and institutional stability.

Why accessibility beats GDP?

It directly affects investment feasibility and index inclusion.

Crisis under capital mobility — mechanism?

Currency mismatch, leverage, contagion, sudden reversals.

Pattern of crises?

Boom, excess leverage, asset bubbles, sharp correction.

Inflow phase — bubble dynamics?

Rising prices attract more demand, fueling bubbles.

Contagion channels?

Spot, forward, swap markets, investor sentiment, trade links.

Household debt crises — why persistent?

Debt overhang, asset price drops, deleveraging, slow recovery.

Globalization — main driver?

Deregulation, tech, liberalization, openness.

Financial innovation example?

Derivatives, securitization, cross-border instruments.

Waves of integration — why?

Shocks, crises, retreat periods, policy shifts.

Amsterdam–London link?

Surplus capital flows during crises, early financial network.

Fed swap lines — purpose?

Provide dollar liquidity, stabilize markets.

BRI cycle?

Initial support, later repayment, shifting China’s role.

Classical gold standard — key feature?

Fixed gold convertibility, limited policy flexibility.

Bretton Woods — system?

Dollar peg to gold, fixed exchange rates, IMF/World Bank.

Trilemma?

Fixed rate, free capital, independent policy—only two can be achieved.

Gold standard rigidity?

Limits monetary flexibility, can cause deflation during crises.

Household debt — why persistent?

Debt overhang, asset drops, slow deleveraging, demand slump.