What is international finance?

International Finance is an economy industry that studies financial interactions between nations. The areas of study include capital flows from the nation to the nation, exchange of exchange rates, business balances, impacts of tax policies and other related problems. Modern theory of international finances focuses more on a wide picture, macroeconomic concepts than fine details of microeconomic approaches. The applications of international finances are often in detailed aspects such as global futures, options and forex markets. The primary financial instrument was the accreditation. The final coin of settlement was gold, a tradition that was transmitted to the 20th century.

By the end of 19 Century, most nations in the West established a different currency than gold or silver, with the provisions that the currency was redeerable in these metals at a fixed price. Fixed relationships to gold allowed central banks to provide their Member Bank liquidity for accreditation or foreign species, ie currency. This improvement in international finances significantlyincreased international trade. World War II disrupted the firm relations of the currency to gold. Central bankers' attempts to return to pre -war currencies to gold are considered to be the main factor leading to a large depression of 30 years.

The 1944 Bretton Woods conference set the US dollar as a reserve currency for the West nations. According to this agreement, the US dollar had a firm relationship to gold and all other currencies had a firm relationship to the dollar. In 1971, President Richard Nixon -red US would no longer maintain a fixed ratio between gold and the US dollar and liberate it to hover against other currencies because it considered the international financial market appropriate.

Since then, the currencies have become the most widespread object in the markets, with more than $ 1 trillion in the US currency traded every day when they are open. Futures trading on grains, American treasury matters, cashier issues in EnglishM cash registers, oil and many world stock markets are now an integral part of international financing. During all the changes he survived the letter of credit and remains an important and widely used tool for funding international trade.