INTERNATIONAL FINANCIAL MARKETS AND INSTITUTIONS Coursework Essay

INTERNATIONAL FINANCIAL MARKETS AND INSTITUTIONS Coursework - Essay ExampleCases in point are explored through some major financial institutions to show the financial statements unreliability to measure asset values. The role of financial intermediaries and imperfect development are then delved into, as to how they propelled the crisis. In order to depart a conclusive view of the global financial crisis, the paper ends with a discussion about how asset securitisation has ended up in speculations, market manias, and last a financial crash in the global financial system. With all these, certain regulations are proposedThe invisible hand view of the economy, as explored in the account book Economics by Samuelson and Nordhaus, will fail to exist under two conditions when there is imperfect competition and imperfect information, and when there are market externalities. The nonstarter in major financial markets exists because of either of these conditions.Prior to the financial crisi s, the financial markets such as simple eyes, bonds and mutual funds markets are considered markets where the invisible hand operates. The stock market has always been referred to as an efficient market by economists. According to Brealey, Myers and Marcus, the competition in this market to find misvalued stocks is intense. So when new information comes out, investors rush to take emolument of it and thereby eliminate any profit opportunities (2004, 165).An efficient market, according to Samuelson and Nordhaus in their book Economics is defined as one where all new information is quickly understood by market participants and becomes immediately incorporated into the market prices (2004, 534). This characteristic of the stock market as an efficient market is attributed to the availability of well-timed information which is incorporated in the prices of the stocks.The stock market indeed needs investors who believe