Fundamentals of international finance

This book focuses mainly on the most important problems in the area of international finance. It is dedicated to Polish and international students taking courses related to international financial problems. Many of the issues which are raised in this book could be widened and taken under deeper analysis during lectures and classes. The problems in the book are presented in the two dimensions: macro-dimension of the international finance – Part I, II, III and micro- dimension of the international finance – Part IV and V.

FOREWORD 7 PART I. INTERNATIONAL FINANCIAL ENVIRONMENT IN THE GLOBAL ECONOMY 9 Chapter 1. International finance and its environment in the era of globalisation 11 Chapter 2. Capital flows in the global economy 15 Chapter 3. International monetary system – past and present 18 Chapter 4. European Monetary System. The common currency – euro 25 PART II. OVERVIEW OF THE ELEMENTS OF INTERNATIONAL FINANCIAL SYSTEM 35 Chapter 5. International financial markets – general characteristics 37 Chapter 6. International and multinational banking 48 Chapter 7. The characteristics of the international financial centres. Offshore financial centres 52 PART III. BALANCE OF PAYMENTS 55 Chapter 8. Balance of payments account 57 Chapter 9. Balance of payments equilibrium and economic forces that influence balance of payments 62 PART IV. EXCHANGE RATE RISK MANAGEMENT 65 Chapter 10. Exchange rate basics 67 Chapter 11. The risk on foreign exchange market 73 Chapter 12. Hedging against foreign exchange risk and hedging techniques 77 Chapter 13. Currency derivatives in hedging 82 PART V. SELECTED ASPECTS OF FINANCIAL MANAGEMENT OF MULTINATIONAL CORPORATION 87 Chapter 14. Defining multinational corporation 89 Chapter 15. Financing multinational corporation 93 Chapter 16. Working capital management in multinational corporation 98 BIBLIOGRAPHY 105 INDEX 109