Global financial system

A loose, and sometimes pejorative term for the set of interconnected institutions, markets and communications systems that cause economic or financial change in one location to have an impact across the human world.

Ideas ...

• The theory of "hot money"
• "Globalisation" and Marxist theories of capital

An interconnected global economy

The idea of such interconnection is not new. Indeed, it could be argued that it has decreased since the abandonment of the gold standard in the 1930's

Tipping

Tipping is an effect whereby users of competing financial exchanges tend to use the exchange which has most users. (The main benefit of an exchange is the opportunity to transact with as many other people as possible. Thus exchanges do not compete for long. The exchange with most customers attracts even more customers until (quite rapidly) other exchanges are driven out of business.

This effect tends to create large monolithic trading centres, where either listed markets or over-the-counter markets are concentrated in a few locations, called the money centres.

The existence of the trading centres is associated with investment banks. Large pools of capital ... z