International Risk Management

International Risk Management

No profit was ever made without taking some financial risk. However, economists such as John Eatwell and Lance Taylor have argued in their text Global Finance at Risk: The Case for International Regulation that international financial markets are intrinsically and particularly apt to pose the threat of risk to potential investors on an individual and a corporate level. Investors in finance base their decisions on guesses, not only about how other investors within a nation will behave, but also about national stability, which affects the stability of the currency. As markets have grown more global in scope, industrialized countries often have pursued a more ...

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must be embarked upon, but judiciously. Unfortunately, as of late, the U.S. economy has become particularly vulnerable to charges of risk because of its current account deficit with other nations, the unwillingness of foreigners to buy U.S. securities based on the increasing national debt, which shows no sighs of abating, and also the perception that U.S. consumers as a whole lack confidence in their economy's growth potential. (Eatwell & Taylor, 2000) The U.S. dollar has been steadily weakening as a result. The United States' continued investment in Iraq and the ever-strengthening Euro does not bode well for the dollar as a currency, although investors with no political or personal interest in the U.S.'s financial health can at least take comfort in the apparent stability of this downturn, when hedging their investments, in the dollar's fortunes, if not its overall impact upon the fortunes of the United States' economy and goods sold abroad. (Schnaue, 2004)
Besides ...

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PAPER DETAILS
Added: 8/28/2017 02:21:17 AM
Category: Economics
Type: Premium Paper
Words: 1047
Pages: 4

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