BBA607 - Role of International Financial Institutions

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PROGRAM BACHELOR OF BUSINESS ADMINISTRATION (BBA)

SEMESTER VI

BBA607 – ROLE OF INTERNATIONAL FINANCIAL INSTITUTIONS

SET – I

Q1.What is Globalization? Explain its advantages and disadvantages.

a) Definition of Globalization.           2

b) Advantages & disadvantages.       8

Answer :

Definition of Globalization:

Globalization is defined as a concept which connects countries across the world through information, trade and technology. In practical terms globalization means the integration of economies and societies through flow of ideas, information, technologies, capital, finance, goods, services and people from one country to another. This is also termed as ‘cross-border integration’ and

Q2.Explain Classification I and Classification II Market participants of Foreign Exchange Market.

a) Classification I        5

b) Classification II       5

Answer ;

The foreign exchange market provides a single, integrated, cohesive and global forum by linking individual foreign exchange centers and markets. It also fixes the relative values of currencies and assists international trade and investment by allowing businesses to convert one currency to another.

Bid rate: It is the rate at which the dealers or market makers buy currency from the customers.

Q3.What is Letter of Credit? List and explain the different types of Letters of Credit.

a) Definition of Letter of Credit.         2

b) Explanation of the different types of Letters of Credit.         8

Answer :

Letter of Credit:

Letter of Credit (LC) is one of the methods of making trade payment while dealing with unknown exporters or importers. LC is one of the most secured modes of payment for international traders, especially when the foreign buyer’s reliable credit information is not there. The exporter

SET – II

Q1.Explain the main functions, lending activities and lending policies of World Bank.

a) Explanation of main function          4

b) Explanation of lending activities    2

c) Explanation of lending policies       4

Answer :

Functions:

The main functions of the Bank are:

(i) To aid in the reconstruction and the developing of territories of its member governments by facilitating investment of capital for productive purposes.

(ii) To advertize private foreign investment by guaranteeing or by participating in loans and other investments of capital for productive purposes.

(iii) Where private capital is not available on fair terms, to make loans for productive purposes out of its own

Q2.Explain Basel III, list its key features and its impact on Indian Banking System.

a) Explanation of Basel III             2

b) Key features of Base III             4

c) Impact of Basel III on Indian Banking system          4

Answer :

Basel III:

Basel III is a global regulatory standard on capital adequacy of the banks, their market liquidity risks and stress testing, as agreed upon by members of Basel Committee on Banking Supervision overseen by the Bank for International Settlement (BIS). Basel III, which was released in December 2010, is the

Q3.Explain The Euro Zone Debt Crisis and China’s Yuan Revolution.

a) Explanation of The Euro Zone Debt Crisis.     5

b) Explanation of China’s Yuan Revolution.        5

Answer :

The Euro Zone Debt Crisis:

The major causes of the European debt crisis are over-borrowed debts in the public and private sector, and system failures and government failure. Looking at the impact of the crisis on the US, the UK and China, it is believed that China would be more impacted than the US. The real economy of both the UK and the US are less influenced by trade. This is because, even though

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