GLOBALISATION (what effect did the OPEC oil price rises of the 1970s have on the financial globalisation process?)

Introduction

Globalization is not a new concept as there have been numerous cycles of globalization stretching as far back as the ancient civilizations . The wave of globalization prior to the oil embargo was after the Second World War . Although this period was marked with rapid economic growth it came to an end in 1973 after the Arab oil embargo that resulted in a rise in oil prices . Financial globalization particularly can be termed as the integration of country 's local financial system with international financial institutions and markets . The main agents of

br financial globalization are the governments and hence they need to liberalize any restrictions on their domestic financial sector and capital account of the balance of payments if any form of integration is to take place (Schmulker , 2004 :5

Dammasch (2010 : 4 ) asserts that the economic environment in times of globalization changes rapidly with capital movements becoming larger and less controllable . Therefore there is usually a need to create a stabilizing system . The situation after the Second World War which was marked by falling credit institutions , mass unemployment , hyperinflation and bankruptcy of enterprises brought about such a necessity . The Bretton Wood system thereby came into creation . Bretton Woods 's agreement of 1944 was part of the decision by the industrialized countries to restructure themselves after the Second World War and the difficulties encountered especially after the First World War for the purpose of financial globalization . There was a great need for these nations to come up with workable rules...