Global financial crisis (GFC) is a phenomenon, which aroused the growth of vulnerabilities among countries all over the world, and it is a fact that different factors contributed to the development of global financial crisis. However, it is a case when developing countries became victims of the situation but not the cause of its development. There are different points of view regarding implications of the global development in terms of crisis; however, it is necessary to take into account contribution of GFC to the limitation of international cooperation. In general, financial crisis has a nature, which damages the development of any international relationship because of lacking resources necessary for integration. GFC aroused many problems in communication of different countries, which contributed to the missing point in stabilization of the situation.
First, it is necessary to start from mentioning the consequences of crisis for numerous sectors of economy; for example, the banking system still has problems with providing a sustainable performance for all its units. It became a challenge to transform the banking system and stabilize the balance sheets reflecting its performance. It is impossible to imagine international cooperation without effective and reliable banking system; hence, it means that countries are missing financial support of transactions and activities.
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Another factor that contributed to the development of the implications in international cooperation is hidden in the breakdown of the industrialized economies; it is a fact that GFC had a destructive nature for all segments of the world’s main areas of welfare and sustainability. As soon as industrial centers faced the impossibility of performing with the same intensity, it became clear that service sectors could not operate at the same level. It is a chain of causes and effects, which created a comprehensive nature of influence on the sustainability of different areas. Countries have an interdependent and interconnected nature, which explains all peculiarities of their growth and development. There are numerous organizations, which integrate countries into sole relationship and unite their interests in gaining success and outstanding performance. One of the examples is the International Monetary Fund, which still suffers from the consequences of Global Financial Crisis as long as many countries borrowed finances from their (Heywood 2011). It caused devastation of financial resources and weakened financial support of business development; turning to vexing policy led to the issue in financial sustainability of many regions despite the fact that the world took care of solving financial problems on the international level with the help of implementation of changes in policy, enforcement, regulation and international cooperation. In addition, the world found the solution to the problem in four sectors of the development: political, social and security measures. However, it remains a problem for many countries to return to the regular activity, cooperation and integration. It is obvious that countries tend to switch to the normal activity; however, it is a problem in the prospect of missing financial support. In general, it is hard to restore international relations between Europe and Asia, the USA and Latin America and, in addition, the missing cooperation results in recession process in many parts of the world (Nanto 2009). GFC demonstrated that in terms of crisis and its consequences, countries lack abilities to apply to the restoration of the sustainability. For example, there were many economic failures in governance and surveillance of regulatory mechanisms; in addition, GFC revealed fragilities in international relations accompanied by destabilization of macroeconomic indicators’ sustainability.
One more aspect, which contributed to the low level of international cooperation, is self-centered character of financial policies of all countries affected by GFC; it is a fact that in terms of destabilized performance, countries tend to protect their own interests. It resulted in the reduction of cooperation and integration, which caused the decrease of the development. For example, GFC reflected mismatch between the U.S. interests and global intention to reduce the negative aspects of financial breakdown.
Another reason for lacking cooperation between countries is that they did not recognize the fact that domestic policy can have a significant influence on the performance of the neighboring countries (Helleiner 2014). The lack of cooperation also became the result of countries’ not following the rules of Stability and Growth Pact and cross-border resolution frameworks. In general, countries switched to the isolation of their economies and financial affairs. In terms of international business, it is mandatory to follow terms and conditions of mutual performance (Lane 2012). However, countries chose to take care of domestic policy in prospect of economy development.
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GFC became the reason of nationalism re-emergence in many parts of the world, and it is not difficult to see the roots of this phenomenon in terms of post-crisis development. Countries started to turn to the domestic performance and limitation of international business in order to ensure personal growth and development. According to Workman (2009), “The current financial crisis came about far less suddenly than Black Thursday and the subsequent stock market crashes, many of the same economic indicators should have led us to believe that a recession was imminent.” However, it is obvious that nationalism without turning to the external markets and cooperation shuts down abilities of countries to grow. It excludes the term of open and free markets from the country’s regular performance. The main intention of countries turning to nationalism is a natural desire to keep investing within the national borders and retain key jobs, which create a basement for the economic enhancement of the region. However, it leads to the lack of the exchange of experience on the international level causing a narrow worldview on financial processes running in other countries. Countries tend to turn to protectionist measures and limit their performance in order to reduce the risk of turning to the non-stability of financial performance. Protectionism is the main reason companies turn to the nationalism of financial operations along with sectors of domestic economy; however, results of the protectionism after GFC are less than disappointing. Nationalism re-emerged as long as companies found involvement into international business risky and non-stable.