Political Science 2211E Lecture Notes - Lecture 20: International Finance, Capital Account, United States Treasury Security
24 Jun 2016
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Document Summary
2 most significant components: the international monetary system : governs how one currency is exchanged for another, the international credit system: how credit is created and distributed across borders. Have the maturity of less then a year us treasury bills are examples of short term investments and have the maturity of less then one year longterm investments foreign direct investment & potfolio investment. Portfolio investment: stock and bonds that does not require operating control. Describes a situation where the current account deficit cannot be financed by the capital account. Long term: adjudstment or financing: adjustment (monetary, fiscal, and trade policy, financing (i. e borrowing) investing in real estate, or hold the dollars in bank vaults, these are the 2 options to work out a deficit. Mandate: stabilize rates, provide short term loans for balance of payment problems. Quota and voting is based on relative economic position. Role of imf in the 1982 and 1994 mexican financial crises.
