International Financial

System
 Learning Objectives
Students are able to understand
• Concept of Global financial system
• Components of International Financial
Environment
Financial System
Financial System is “the system that
allows the transfer of money between
savers (and investors) and borrowers.”
Gurusamy, writing in Financial Services
and Systems has described it as
comprising “a set of complex and closely
interconnected financial institutions,
markets, instruments, services,
practices, and transactions.”
A financial system can operate on….
• Global Level
• Regional Level
• Firm Specific Level.
The Firm’s Financial System is the set of
implemented procedures that track the
financial activities of the company.
On a Regional Scale, the financial
system is the system that enables
lenders and borrowers to exchange
funds.
The Global Financial System is basically
a broader regional system that
encompasses all financial institutions,
borrowers and lenders within the global
economy.
Global Financial System
The Global Financial System (GFS) is
the financial system consisting
of institutions and regulators that act
on the international level, as opposed to
those that act on a national or regional
level.
• The main players are the global
institutions, such as 
– International Monetary Fund
– Bank for International Settlements,
– National agencies and government
departments
Components of International
Financial Environment
Foreign International
Exchange Financial
Market Markets

Currency
Convertibility

International
Balance of Monetary
Payments System