Exploring Global Financial Management: Functions and Critiques

This essay provides an overview of global financial management, focusing on the roles, objectives, and criticisms of key international institutions such as the World Trade Organization (WTO), the International Monetary Fund (IMF), and the World Bank. It discusses global integration and international finance, highlighting the importance of currency exchange rates and the functions of the WTO in supervising trade rules. The essay also examines the IMF's role in promoting monetary cooperation and the World Bank's efforts to reduce poverty through loans for capital projects. Furthermore, it addresses criticisms of these organizations, including concerns about their impact on developing countries and the potential for anti-developmental policies. The document is available on Desklib, a platform offering study tools and resources for students.

Running head: GLOBAL FINANCIAL MANAGEMENT
Global financial management
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Author Note

Global Integration:
Global integration refers a process through which an organisation combines its
various activities all over the world for operating with the help of same strategies. This
process involves the process of technology development and product standardization (Curran
et al. 2017). Hence, it can be said that economic integration or global integration is an
arrangement within various geographical regions that can reduce or eliminate trade barriers
among them and to coordinate fiscal and monetary policies.
International Finance:
It is a part of financial economics, which deals with two or more than two countries
monetary interactions. Hence, this part focuses on currency exchange rates and foreign direct
investment (Schoenmaker 2018). Currency exchange rate is essential as a lower currency of a
country makes its exports cheaper and imports as expensive in international market. The
opposite situation occurs for higher exchange rate.
The World Trade Organisation (WTO):
The WTO is an international institution, which supervises trade rules between two
countries in world market. This organisation is formed on agreements that are signed by most
of the trading countries across the world. The chief characteristic of WTO is to support and
protect producers related to goods and services, imports and exports from managing their
businesses (Ruggie 2017). Hence, the WTO has some objectives that are described as
follows:
1. To confirm full employment along with large increment in effective demand
2. To develop living standard of people of all member countries
3. To enhance service related to trade
4. To increase trade and production of goods
5. To adopt environmental protection

6. To use world resources optimally
7. To adopt the concept of sustainable development
Criticism of the WTO:
Trade rules of the WTO act unfavourably for developing countries while many
developed countries have received tariff protection. This in turn has helped those developed
countries to emerge and protect new industries in domestic industries. On the contrary, free
trade restricts infant industries of developing countries to develop further.
International Monetary Fund (IMF):
This international organisation works to encourage monetary cooperation in world
market through securing financial stability, promoting sustainable economic growth and high
employment (Daoud et al. 2017). Moreover, this organisation intends to facilitate
international trade and decrease poverty across world. Thus, some main roles played by the
IMF are:
1. To maintain stable exchange rate among countries
2. To develop international trade
3. To restrict from adopting various exchange rates
4. To increase lending operations
Criticism of the IMF:
Developed countries have played dominant role to control developing countries.
Some policies of this organisation act as anti-developmental as its deflationary impacts
lead to loss of employment and output in economies.
World Bank:
This international financial institution provides loans to various countries across
world for capital projects. The chief goal of this bank is to decrease poverty. It has two

bodies, which are, the International Development Association (IDA) and the IDRD. IBRD
provides loans for developing economies and reducing decrease poverty (Eichenauer 2018).
Criticism of the World bank:
The policies of this organisation are not applicable for underdeveloped countries. The
bank does not provide general support to this country for development.

References:
Curran, J., Esser, F., Hallin, D.C., Hayashi, K. and Lee, C.C., 2017. International news and
global integration: a five-nation reappraisal. Journalism Studies, 18(2), pp.118-134.
Daoud, A., Nosrati, E., Reinsberg, B., Kentikelenis, A.E., Stubbs, T.H. and King, L.P., 2017.
Impact of International Monetary Fund programs on child health. Proceedings of the
National Academy of Sciences, 114(25), pp.6492-6497.
Eichenauer, V.Z. and Knack, S., 2018. Poverty and policy selectivity of World Bank trust
funds. Journal of International Development, 30(4), pp.707-712.
Ruggie, J.G., 2017. The theory and practice of learning networks: Corporate social
responsibility and the Global Compact. In Learning To Talk (pp. 32-42). Routledge.
Schoenmaker, D., 2018. Resolution of international banks: Can smaller countries
cope?. International Finance, 21(1), pp.39-54.