The money retains purchasing power over time, allows to separate the moment of the formation of income from the moment of its use. This function is related to the property of Liquidity that is the measure of the facility with which an asset is converted into a medium of exchange. This function results in different money settings (M0, M1, M2, M3, ...). This aggregates depending on the central bank definition.
Published in Chapter:
The Restructuring of the Financial System in the 21st century
Copyright: © 2019
|Pages: 22
DOI: 10.4018/978-1-5225-8906-8.ch002
Abstract
The financial system on the first decades of the 21st century followed the trend of the last decades of the 20th century with corporate restructuring and international financial markets integration and delocalization being oriented by profits and mergers and acquisitions. The global economy and financial structure changes, in the current century, derived from financial innovations, market deregulation, globalization, technology, market structure changes, regulatory reforms, and (re)formulation of central banks' monetary policy. Currently, the financial system is interconnected, interactive, interdependent, and became over-leveraged. The present chapter focuses on the analysis of the evolution of the financial system and the main determinants of global financial markets restructuring on last decades to explain the relevant changes verified in the financial system in the 21st century. After a literature review, an evaluative and descriptive macro analysis of the financial system is presented to study the process of restructuring of the financial system in the main developed economies.