Examining The Impact of Wars And Geopolitical Crises On The Global Financial System In Recent Years

Irene S.

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Examining The Impact of Wars And Geopolitical Crises On The Global Financial System In Recent Years

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University of Washington, war, crisis, geopolitics, financial system, financial market, market fluctuations

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Abstract

International financial systems comprising a vast network of international banks and regulators experience adverse impacts following massive global crises such as wars and civil wars. Economic history has shown that crisis is one of the most notable causes of financial market volatility, large-scale disruptions in the global supply chain, and alterations in the investment strategy (Baldwin and Freeman, 154, 2022). With deepened globalization, the interlinked economies increasingly make the entire financial system worldwide, more susceptible to geopolitical strife. The hiked sensitivity can cause immediate and even violent economic effects that can touch everything from stock market situations to the fluctuations of the exchange rates.

Introduction and Background Information
1. Background Information
2. Evolution of the Concept
Problem Statement, Objectives, and Literature Review
1. Problem Statement
2. Research Objectives and Questions
3. Research Literature
Data Analysis and Conclusions
1. Data Collection
2. Summer Statistics
Discussion and Conclusions
Future Directions

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Extract

[...] Discussion and Conclusions Straining through the data, short-term results commonly result in a considerable loss of stock value and high volatility of the markets in case of geopolitical emergencies. In contrast, long-run outcomes are beaten by the region's resilience and adaptive capacity to the crises. The other point is that the markets may spike up quickly in areas with stable economic ground and a well-prepared recovery strategy. However, it may take a year or more for areas with a smaller and weaker base of monetary value to bounce back. [...]

[...] Business & Economics, 1(1), p.5. Phan, D.H.B., Tran, V.T. and Iyke, B.N Geopolitical risk and bank stability. Finance Research Letters, 46, p.102453. Trinh, H.H. and Tran, T.P Global Banking Systems, Financial Stability and Uncertainty: How Have Countries Coped with Geopolitical Risk? Financial Stability and Uncertainty: How have Countries Coped with Geopolitical Risk. Yu, Y., Guo, S. and Chang, X Oil price volatility and economic performance during COVID-19 and financial crises of 2007-2008. Resources policy, 75, p.102531. [...]

[...] The development of this phenomenon offers an essential view of the background for the analysis and examination of modern geopolitical crisis and their impacts on the global financial system, which is now intricately connected and technologically advanced. The ascent of electronic financial services and electronic trading platforms has significantly altered global markets and made them more efficient, responsive, and volatile because now geopolitical activities from one state can quickly affect markets. Geopolitical turmoil has become a new factor in the financial markets. It draws attention to the importance of taking risk management operations seriously and monitoring the market in real time to lessen the negative influence of geopolitical issues. [...]

[...] But this approach is progressive at that scale to practical solutions lies also in the financial system's long-term resilience and ability to adapt. The significance of these models for short-term dynamics is undeniable. Still, they need to capture the basic notion of gradual adjustments, which include strategic diversification, policy reforms, and innovations in financial technology. The fact that financial markets can adapt in the form of long-term adaptations to the initial shocks and restore or even enhance stability helps go for the comprehensive assessment of crisis effects. [...]

[...] Implementing both approaches is crucial because it contributes to a comprehensive understanding that supports the academic work and the theories for improvements in economic policy formulation. 3. The Impact of Geopolitical Uncertainty on Financial Markets: An Event Study of the Ukrainian Crisis (Trinh and Tran,1, 2022; Phan et al 2023). Methodology and Limitations: The study pays special attention to a singular geopolitical upheaval by using the event study methodology, a quantitative approach that helps measure the change in stock price as a response to a given event. [...]

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