Chapter One - Financial Havens
The prosperity of economies realized monumental benefits from the technology revolution of innovation. It has enabled major developed economies to penetrate the market place of under developed and emerging economies to a degree not before possible.
Therein is provided the new frontier of economic expansion, opportunity to grow economies which creates a path to revitalizing from the devastation of a brilliantly managed modern version of a depression and escape from governmental blunder. And it is this spectacular innovation and technology revolution that has proved elusive and defiant of precedent jurisprudence principles.
Technology ushered in a financial environment that changed the ground rules of the two most important components of this access to markets: international trade and financial capital movement. The expansion of global trade resurrected themes of old, the principles of mercantilism.
Mercantilism is the raw basic need dating to the early fourteenth century where Italian merchants, the Medici's, traded along very ancient north-south routes. This was generated by the need to import and export. The underlying philosophy was exports were to exceed imports, the origin of surplus trade. Trade continues as a barometer of commerce and its attendant benefits of market expansion.
However with the innovation revolution, the fluid movement of capital between global financial markets found that the speed and velocity magnified the dynamics and influences of economic progression. The international community did not possess an international apparatus to thwart the adverse effects of such revolutionary innovation. This influence of capital velocity by innovation formed new complexities of dramatic increases of risk.
It was the effects of a transformation of external market capital to particular domestic markets with unprecedented lighting speed and in unprecedented amounts that created financial risks that were unforeseen. And the same was true with respect to exiting capital of domestic internal markets to external Euro markets. Such enormous excesses of liquidity nurtured domestic economies as they basked in these disproportionate allocations of global capital.
A binge occurred and became intoxicating for the most sophisticated economies. It engendered irresponsibility and one of history's most imprudent and dysfunctional episodes of government. The thing speaks for itself as developed economies inch their way utilizing untested waters of monetary policy to restore stability and confidence in the international monetary system.
It is for these reasons that Financial Havens are the interconnection that facilitates global transacting to facilitate international commerce and the international monetary system. This naturally pours-over to the subject matter of Eurocurrency and Global Markets. These concepts of internal domestic markets and external Euro markets form the foundational basis upon which international commerce flourishes.
Understanding Financial Havens and their relevance to the International Monetary System is important and requires a cursory explanation of the United States regulatory scheme. A base foundation of supervision, examination, and enforcement of this banking system establishes principles of influences in the connection. It is presented in an abbreviated manner to enable the reader to understand the need to achieve and maintain prudent standards for financial institutions.
What is to be gleaned from this observation is that international commerce that enters the external market, enters a lightly or non-regulated market place with no defined lender of last resort. That is the nature of Financial Havens. And as importantly, despite the defic