Chapter 2: Global financial players
Financial globalization is much more than a purely geographical phenomenon. The global player is, by deﬁnition, present all over the globe. But this is nothing new. As early as the 1960s, large banks in industrial countries had 16 The tigers, the tamers, the circus branches in all the major ﬁnancial centres, mostly to assist domestic customers in their foreign trade transactions. What is new is the fact that global players are now simultaneously present in all countries but also in all markets, using the full spectrum of instruments at their disposal (bonds, shares, currencies, derivatives and so on), and carrying out a multiplicity of functions. In addition to borrowing and lending, they manage assets on behalf of clients, invest their own resources, hedge risks, and engage in speculation. The global vocation of these intermediaries has aﬀected their internal organization. Activity is no longer divided between departments dealing with ‘domestic’ and ‘foreign’ markets, but has been broken down into specialized functions carried out on a global scale. For example, one department will look after global equity markets, another global ﬁxed income or global foreign exchange. Within each sector there are further specializations but always in a global perspective. For example, within the global equity department there will be a separate division to deal with telecom sectors worldwide and monitor the stock market performance of, say, AT&T, Deutsche Telekom and British Telecom in order to make appropriate reallocations of investments based on the relative proﬁtability of each. Integrated...
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