Task 20: Write a term paper focusing global financial system.

INTRODUCTION

The governance environment is crucial in deciding whether the financial system's expansion and
repercussions are limited or unlimited. In the majority of countries, political leaders make policy
decisions, central banks implement rules, and courts uphold the rule of law. Each person's participation
in a country's governance institutions has the potential to influence the financial system's direction. This
article investigates the impact of political stability, regulatory quality, and the rule of law on financial
system results. In 139 nations, we also look at the impact of a country's level of development on the rate
of recovery and financial system stability. Our findings have implications for political science and public
policy scholars and practitioners, as well as for institutions.

BODY

Efficiency was more affected by the financial crisis than other financial indicators. To keep the economy
stable, the government, via the central bank, must act. Financial systems have sufficient safeguards in
place to reduce the danger of a banking system failure to a minimum. Based on assessments of the
governance setting in the first three hypotheses, we explored whether financial system outputs were
more or less sustainable. Political stability, according to the authors, has the potential to impact financial
sector competitiveness by lowering government dependence and interference.

Except for the dependent variable access, the political stability variable affected all dependent variables
in the predicted way in all models. There were no statistically significant links between the rule of law
and the outcomes of the financial system. All four financial system models lack depth or efficiency. This
suggests that banking predictability is more a function of the market than of regulations or legislation.
This could also indicate that adjustments made in the aftermath of the 2008 financial crisis, such as
those implemented in the United States, were deemed necessary to minimize future financial system
volatility.

CONCLUSION
A multidisciplinary study looks into the stability of the financial system during growth and volatility
during crises. Only depth, efficiency, and stability are influenced by political stability, as one might
assume. The contradictory findings could be attributed to the fact that the governance framework as
well as financial institutions can influence these four financial system outcomes. In comparison to the
Great Depression, the 2008 financial crisis had a small impact on financial system outcomes and swiftly
recovered. Understanding how different aspects of a country's financial system interact with the
governance framework and institutions before and after a crisis might help us better prepare for future
crises.

The regulatory duties of central banks and their types of collaboration with financial intermediaries
could be separated through research. It could imply a greater strategic use of hybrid institutional logics,
in which the government collaborates more and private companies accept greater responsibility for the
social consequences of their actions