While the Global Capital markets experienced continuous expansion ever since 1980, transnational capital remains one of the most important driving forces of economic globalization. Mature financial markets may be heading for slower growth, while the emerging markets are likely to account for an increasing share of global asset growth. Such as the Central American Bank for Economic Integration is hoping to persuade the UK government to join it as a shareholder, holding out the prospect that UK companies building infrastructure in central America might be able to gain preferential funding on attractive terms now enjoyed by Korean firms (as reported by Hay, in global news, Feb 2020). However, an implication of the growing internationalization of capital and emerging markets is that domestic economies are increasingly affected by international events and trends in other countries.

Required:

Discuss the key factors driving the trend toward the globalization of financial markets and evaluate the role of general-purpose financial statements in global financial markets. [10 marks]