THE EFFECT OF GLOBALIZATION ON FINANCIAL MARKETS

Abstract

The paper explores the changing nature of the relationship between globalisation and financial markets focusing on the influence of increased levels of connectivity among nations on the structures of markets regulation flow of capital and ability of financial markets to withstand shocks. This research explores theoretical underpinnings, analyses major indicators, and compares developed and developing economies – especially United States and India – through a qualitative and analytical perspective. The work presented here demonstrates that globalisation has enhanced the efficiency of capital markets, opened up access to finance, and prompted the rise of financial innovations alongside greater volatility in markets and a heightened sense of regulation complexities. Analysis of the case studies and figures for these years indicate that globalisation carries with it advantages and burdens. Grossing improved economic development and strengthening market linkages but at the expense of increased market exposures and possible instabilities. It is proposed that the guaranteeing of global financial integration, by means of strong regulation and balance, is fundamental in bringing about sustainable long term market stability. The research enriches professional discourse by combining theoretical outlooks and market developments and offering insights for the policymakers and financial operators.