Global Financial Management & Summary slp Assignment

Global Financial Management & Summary slp - Assignment Example Again monetary policy of a central bank try to control the fluctuation of currency value and future prediction of central bank affects this factor. Balance of payment in this country also fluctuate the domestic currency and affects the demand and supply of foreign currencies as well as the exchange rate. Foreign investors who want to invest U.S. (which has a strong dollar market) have to pay more than their own domestic currency and hence investors are not encouraged to invest their money in US economy (Anbarasu, 2010). In United States banking activities are regulated by both the state government and the federal government. Goldman Sachs, Bank of America, Wells Fargo, Citigroup and JPMorgan Chase these are the five major largest banks which hold 56 % position in the US economy. The banking system and economic condition in US are now in a complex situation. Fluctuation in currency is another important reason to discourage the investors for investing money in this economy. So this can be said that investing in banks of US is not a safe procedure at least in the present days. Federal government does not take any kind of responsibilities to save and protect the interests of investors and lenders at the time of financial crisis and their financial decisions also may affect the interest of related parties. US has faced financial crisis in the financial year 2007-08. It was the worst financial crisis after the great depression of 1930. The prices of stock was declined in the US stock market and US economy has faced a large amount of bad loans and lost more than $ 1 trillion toxic assets. This is observed that business owners are facing difficulties for getting loan from the financial institutions in US. A business can seek foreign investment if the interest rate and value of dollar will be higher. In such case investor can get higher amount