GLOBLIZATION OF REGULATION

Globalization of regulation is the process of interaction and integration between

multi-culture people, companies and government of different nation worldwide
on the based of such principles, rules and laws designed to govern conduct. One
most discussed regulation topic in the current world economic forum annual
meeting 2010 Davos was banking regulation system in US which brought down
the global economy. The globalization of US failure banking deregulation which
spread globally and affected the securities tied with real state and CDS market
world wide. A video coverage between president and Senator Jim Bunning
showed “the root of this global crisis is the failure of US regulation system”
(Bunning.2008). The effect of this expansion of deregulation causes the loss of
$25 trillion to the global economy and $637 billion worth loss to the foreign
investors. (CNBC.2008). the FDIC closed down 35 banks in 2007 and witnessed 77
bank failures by 2009. (Filger.2009). the serious downside of the US regulation
system was clearly seen with lack of regulation in the CDS market. Because
regulation of CDS market was prohibited under the commodities feature
moderation act of 2001.(Leah.2009). And US banking system (Wall Street
investment bank)is the root which is linked with global banking system. The big
picture came is sunshine when in the year 2007 US GDP was valued $13.3 trillion
dolor. (Josh.2008) and in third quarter for the same year the top 25 banks had
written CDS (Insurance) of $14 trillion. (Morgenson.2008). so logic is even if US
liquidate its entire GDP than still it would not be able to cover up its debt.
Another recent effect shown with disappointing news of 4.2 million jobs lost in
the US in 2009. (Euronews, 2010). And since beginning of 2008 about 6.7 million
people lost their jobs in US. (BLS, 2010).

Opportunities/threats for international business

On the flip side of this global crisis I believe many under developed countries such
as India, china, Brazil and Russia can be benefited. Because these countries run
regular banking rather than focusing more on investment banking so
opportunities for international business can be as.

1. It is been witnessed that about 50,000 IIT graduated from India are working
in foreign countries.(CNBC.2008) But because of global recession these IIT
graduates are loosing their jobs and coming back to their countries which
means Indian business industries have an opportunity to hire a good talent
pool at lower salary scale. So company’s profitability can grow faster with
more effective workers.

2. On the other hand this global crisis is also helping in getting a big part of
investment from Middle East countries. According to news coverage the
Middle East countries have $2000 billion of money to invest in foreign
companies.(CNBC.2008) but as India, china, Brazil and other countries who
came up with a good economic condition as compare to US and other
effected countries. Have an opportunity to get a big part of this investment
for their business industries.

3. As far as auto mobile industry is concerned India is said to be a global hub

for small size cars. America and other Europe countries had witness a 40%
sales fall in the big size cars because of serious global economic crisis.
Which in result the well-known automobile companies now focusing on
small size cars manufacturing for making profit. Because of rising in petrol
prices the selling of small size cars is increased and Hyundai, Toyota, Honda
and walls wagon like big name companies are announcing to increase their
manufacturing established plant for small cars. And it is also anticipated
that by 2011 the export of small cars from India will go up to 300% .
(CNBC.2008)