Example Of Should Financial Flows Be Regulated Essay
The debate on whether financial flows should be regulated or not is one of the commonly discussed topics in economic forums. Since the restoration of worldwide principal markets in the 1960s, there has been increased capital flows across the boarders. The increase has been intense such that transnational value stations have now started outstripping international economic productivity. There have been several financial crises that have been spreading all over the world, and many governments have stepped up to solve these crises by the use of unconventional methods of financial policy in order to protect their countries. However, many people and countries do not think it is right to use the unconventional methods, given that these are usually international crises. On the other hand, there are other groups that support the idea of governments having to protect themselves from the international financial crisis. This paper is going to discuss the reasons as to why financial flows should be regulated.
The regulation of the financial flows is also important because it helps in the regulations of finial policies. Financial policies are significant in the promotion of economic understanding and economic peace. As a matter of facts, the financial flow regulation is dependant on the corresponding policies that are supposed to be applied and used in the making and implementation of the financial floe regulations. In addition, the financial flow regulations have the ability to enhance and promote the capital productivity in the economy, as well as, increase the international economic welfare. As a matter of facts, a number of EMEs in the contemporary world, prefer to run the present account oversupplies as compared to the scarcities just like it used to be in the previous days. This means that there is a decrease in the necessity of capital and finances from outside. This remains a big problem in the international market because such methods of managing financial crises do not allow financial circulation because such countries tend to recycle their surpluses in order to develop their own economies.
The regulation of financial flows plays a vital role in enhancing economic growth all over the world. The fact that all the economies of the world are interconnected in one way or the other means that a financial crisis in one country, affect the other economic status of the other countries in one way or the other. For this reason, it is important that the financial flow is regulated. The regulation of financial flow prevents international economic crises from occurring because the regulations ensures that all the countries are well protected. The only drastic solution and remedy for the recent and common international financial crisis and the problems of surplus recycling by some countries, as well as, the systematic and financial flow crises would be to change the current international economic systems by adopting the multinational universal regulatory currency. This radical remedy is said to be among the best ways of curbing the issue of capital flow. The need to regulate financial flow may also become more efficient because it tries to advance the economic policies for the proper ways to make use of the surpluses and reduce recycling. Regulating financial flow would elevate the chances of a successful economy and also promote the measures that are adopted in order to regulate financial flows.
On the other hand, regulation of the financial flow may have a number of disadvantages that may be brought to a country when adopted. These risks include the fact the countries that have a low income are usually not always involved in the international economic forums. They are in most cases in the darkness of what is happening. Such counties only help the well up countries to continue to grow their economies. Therefore, they opt to use their own methods of financial crisis method. Such governments believe that the use of their own methods, as well as, recycling their surplus is the only way to for them to protect themselves from the economic crisis.
In conclusion, it is evident that the regulation of financial flow is very important in the regulation of the international capital flow amongst many other reasons. However, the regulation also has some risk that comes with the adoption of the financial regulatory policies. Nonetheless, the regulation of the financial flow enhances the general financial growth across all countries