International Trade Finance and Investment

INTERNATIONAL TRADE
FINANCE AND INVESTMENT

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
EXECUTIVE SUMMARY.............................................................................................................1
REPORT..........................................................................................................................................2
a) Evaluating how financial market work for allocating capital within domestic economy and
internationally for trade, investment and development purposes................................................2
Background of Financial Markets...............................................................................................2
Capital Allocation within Domestic Economy............................................................................3
Capital Allocation within International Markets.........................................................................4
b) Using economy of UK critically evaluate what are the key challenges that country faces due
to industrialisation and trade policies?........................................................................................5
Evaluation of an Economy of UK...............................................................................................5
Critical Evaluation of Challenges that the country faces due to Industrialisation and Trade
Policies.........................................................................................................................................6
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REFERENCES..............................................................................................................................10

EXECUTIVE SUMMARY
International trade refers to exchanged of products and services across countries or
worldwide so that each has sufficient products to meet their respective requirements.
Globalisation have provided opportunities to countries to easily expand their business or making
financial investment in different countries. This report has discussed about financial market, the
way capital allocated in domestic and international market. At last has included evaluation of key
challenges that have been faced by country due to industrialisation and trade policies.
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REPORT
a) Evaluating how financial market work for allocating capital within domestic economy and
internationally for trade, investment and development purposes.
Meaning of Financial Markets
Financial markets are the marketplace which provides avenue or platform for sale as well
purchase of the financial assets such as stocks, bonds, foreign exchange, derivatives, raw
material and precious metals known as commodities in financial markets. They are known by
different names like the capital markets and Wall Street but they mean the same. Investors and
businesses go to the financial markets for raising money for growing the business and making
money.
Financial markets help the businesses to attract funds from the investors and channelizing
them into corporations. It allows the corporations in financing the operations and achieving
growth. Money market allow firms in borrowing funds over short term, while the capital market
allows corporations in gaining the long-term funds for supporting the expansion. Borrowers
without the financial markets would have faced difficulty in finding the lenders by themselves.
The intermediaries like investment bankers, banks and the boutique investment help in this
process of fund raising. Bank takes deposit from people who are having money for saving. They
could then lend from pool of the deposited money to ones seeking to borrow.
Background of Financial Markets
The trading system was established on 1 January 1995 named as WTO (World Trade
Organization) but it was half century older a since 1948, the General Agreement on Tariffs and
Trade (GATT) provided approval and rules for the system. Market is strictly used for the
exchanges which facilitate trade of financial securities like stock exchanges or commodity
exchanges. Since 2008 there is resurgence of the interest in financial and economic history
among the investment professionals. Financial market creates liquidity for the businesses that
allows them to grow and the entrepreneurs in raising money for the ventures (Maggiori, Neiman
and Schreger, 2020). The risk associated is reduced through publicly available information to the
traders and investors. Markets calm economy through instilling confidence in the investors and
investor confidence stabilises economy. There is an immediate and straight forward connection
between the monetary market, capital allocation and venture as the main function of the financial
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