Open access peer-reviewed chapter - ONLINE FIRST

Perspective Chapter International Financial Markets and Financial Capital Flows: Forms, Factors and Assessment Tools

Written By

Nemer Badwan

Submitted: November 1st, 2021 Reviewed: January 10th, 2022 Published: March 2nd, 2022

DOI: 10.5772/intechopen.102572

Macroeconomics Edited by Musa Jega Ibrahim

From the Edited Volume

Macroeconomics [Working Title]

Dr. Musa Jega Ibrahim

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This paper/chapter empirically examines the reaction of international financial markets and financial capital flows across many developing and emerging market economies, with a particular focus on the dynamics of capital flows across emerging market economies. Using daily data from (2000 to 2020) and controlling for a range of local and global macroeconomic and financial factors and global financial crisis, we use a fixed-effects panel approach quantitative and descriptive approach combined to show that emerging markets have been affected more than advanced economies. In particular, emerging economies in Asia and Europe have experienced the strongest impact on stocks, bonds and exchange rates in recent times, as well as sudden and large capital inflows. Our findings suggest that very large fiscal stimulus packages, as well as quantitative easing by central banks, helped restore overall investor confidence by lowering bond yields and boosting stock prices. Our findings also highlight the role that global factors and developments in the world’s leading financial centers play in financial conditions in emerging markets and developing countries. More importantly, the impact of quantitative easing measures related to the global financial crisis by central banks in developed countries.


  • international financial markets
  • financial capital flows
  • financial development
  • economic growth
  • developing counties
  • emerging markets
  • global financial crisis

1. Introduction

International financial markets and emerging markets, financial capital flows play an important role in the economies of developing and developed countries alike, as they are one of the financial policy tools used to mobilize domestic savings and an attractive tool for foreign investments, in addition to their active role in financing economic development plans. With the growing deficit of the public budgets of some countries, these countries have started to search for non-sovereign financial resources to finance their development plans, so the financial markets have become one of the important tools used for such development goals.

The international financial markets and financial capital flows have witnessed tremendous developments in recent years, whether in terms of new financial instruments or terms of structural changes in market divisions, the creation of new markets and the development of regulations related to trading, settlement and clearing, which has called for the various countries of the world to make intensive efforts to keep pace with these changes due to the effects of this, positive on the liquidity and depth of financial markets [1, 2].

Moreover, the main factors for this development are global economic growth and the continent’s growing integration into international financial markets. The capital yield at the Johannesburg Stock Exchange (JSE) was 43% in (2005), in third place after Seoul and Warsaw.

The increasing capital flows in the international financial markets and emerging markets, developed countries have raised various concerns worldwide. One main concern is the impact of the sharp decline of capital flows so-called sudden stops on financial markets and the stability of banking systems and the economy [3].

The sudden stops and banking crises have been identified as the two main features of most financial crises, including the recent Asian Financial Crisis and Global Financial Crisis.

However, how capital flows and banking crises are connected remains unanswered. Most current studies on capital flows are empirical work, which faces various challenges. The challenges include how data has been collected and measured in each country and how sensitive the results are to the data and the adopted methodologies [4].

Moreover, the links between capital flows and banking systems have been neglected. This book helps provide some insight into the challenges faced by empirical studies and the lessons of the recent crises.

The book develops theoretical analysis to deepen our understanding of how capital flows, banking systems and financial markets are linked with each other and provides constructive policy implications by overcoming the empirical challenges [5].

However, the problem remains only about (87000) Africans, i.e., less than 0.01% of the total population, benefit from this kind of growth. At present, more than half of the people on the continent survive on less than 1.9 USD a day. The World Bank (2007:79) predicts that by (2030), more than three-quarters of the population of sub-Saharan Africa is likely to be among the world’s poorest [6].

The effects of poverty and wealth are not independent processes, but interrelated. Those talking about poverty cannot remain silent about wealth. An important correlation between poverty and wealth concerns financial markets, and in the move towards globalization, this is getting to be even more important [7].

The depth and global ramifications of the East Asian financial crisis which broke out in (1997) have confounded analysts and forecasters, and have been a major cause of more recent periods of extreme volatility in international financial markets. Expectations that the crisis would be confined to the region and that recovery would be relatively rapid have been repeatedly belied by events [6].

By the middle of (1998), it was clear that it was sharply reducing growth rates not only in the directly affected countries but also in most other developing and transition economies. The international liquidity crisis set off by the currency collapse and debt default in the Russian Federation raised the possibility that the full global implications might not yet have been realized [8].

On the other hand, the relatively benign response of financial markets to the later Brazilian currency crisis and the continued rapid growth of some major industrial countries suggest that the repercussions may still be restricted largely to developing countries [9, 10].

Subsequently, to the real economy, which means production and trade financial markets had a secondary or subservient position. The three market segments were largely separated from one another. Before the (1970s), financial markets were mainly national markets, thus concentrating on the prevailing national economy. Foreign trade is only related to monetary transactions and foreign investments [11].

Moreover, until the (1970s) international financial markets were regulated politically by the Bretton Woods system, which at its core promoted stable rates of exchange between important currencies and the control of capital transactions. This system provided a relatively stable general framework for the world economy, as well as considerable growth [12].

Financial markets were not limited in terms of individual national economies, but were opened internationally and globally. At the same time, business size and variety grew by scales. Proportions between the real economy and financial systems became inverted, which led to the economic dominance of the financial markets, creating the trigger, Centre and motor for the present wave of globalization [12, 13].


2. Introduction to international financial markets and financial capital flows

2.1 The emergence of international financial markets and financial capital flows

The most important financial markets and financial capital flows known to economic history in Europe, and indeed in the world - and in which they were dealt with bills of exchange, promissory notes, and precious metals are the markets of Venice and Genoa in Italy and the Frankfurt market, and these markets were among the most important European financial markets dealing with the Middle East, which witnessed in that period a huge commercial activity as a center of communication between the far East and Europe.

With the development of capitalist economic thought that calls for specialization and division of labor, and with the emergence of the industrial revolution, the importance of individual investments that require large financial resources that exceed the capabilities and capabilities of individuals has increased [13].

As a result, joint-stock companies appeared which opened a wide field for the participation of a larger number of shareholders in the ownership of companies, thus ensuring the necessary financing for them. On the other hand, the number of banks has developed and their importance has increased in various countries [4].

All these factors and conditions, as well as the expansion of investment projects and commercial transactions, contributed greatly to the emergence of financial markets as an effective tool for mobilizing the resources and savings needed for commercial and investment financing [14].

The first financial markets to appear were in the seventeenth century (17th century) in Amsterdam, then in the eighteenth century (18th century) in Venice, and the nineteenth and twentieth centuries (19th and 20th century), respectively, witnessed the emergence of the British and international financial centers American [15].

Stock exchanges appeared in the nineteenth century (19th century) for trading goods, products, and securities and concluding deals. The emergence of stock exchanges was the result of many economic factors, the most important of which are [16, 17]:

  • Increasing the financial activity of large institutions that use huge funds, such as banks, insurance companies, and transport and communications companies;

  • Increasing international trade exchanges, which saw the movement of commodities and raw materials from the colonized countries to the colonized countries.

  • The financial markets in developed countries have developed in conjunction with the changes and developments taking place at the technological level, and the volume of production and large business units has grown faster than the available means of financing.

The activity of the financial markets has increased dramatically. The number of financial markets in the United States of America has reached fourteen at present, the most important and largest of which is the New York Stock Exchange. In Britain, too, all financial markets have merged since (1913) into one system, which is the London Stock Exchange [18].

In Japan, eight stock exchanges are currently operating, led by the Tokyo Stock Exchange. This is the case in Germany, where there are also eight stock exchanges, the most important of which is the Frankfurt Stock Exchange. As for France, there are seven stock exchanges headed by the Paris Stock Exchange [1].

2.2 The functions of international financial markets and financial capital flows

Financial markets and financial capital flows play an important role in economic life, and if we try to present the most important functions that they can perform, they can be summarized as follows:

  1. Developing savings by encouraging investment in securities, and directing savings to serve the national economy.

  2. The stock market encourages the development of the habit of investment saving, especially for small savers who cannot carry out independent projects with their little money, and therefore they prefer to buy securities according to their money, and this helps to serve the purposes of development and reduce inflation, as it helps direct Savings towards appropriate investments (either in stocks or bonds) according to price trends.

  3. Assistance in transferring funds from groups that have surpluses (the lenders) to groups that have deficits (borrowers), and the lenders reduce their current consumption expenditures in exchange for higher incomes in the future when the maturity dates of those loans come, and when the borrowers use that borrowed money to buy and rent the factors of production, they will produce higher incomes, thus increasing the standard of living not only for the borrowers but for all segments of society [9].

  4. Contribute to financing development plans by offering government securities in that market. The emergence of the importance of securities issued by joint-stock companies was accompanied by the increasing recourse of governments to public borrowing from members of the people, to meet their increasing expenditures and to finance development projects, by issuing bonds and bills issued by the public treasury with different terms. It is less important than other aspects of employment [10].

  5. Contribute to the support of internal and external credit. As the buying and selling currencies on the stock exchange is a manifestation of internal credit, if the manifestations of this credit increased to include securities traded in global stock exchanges, it became possible to accept these securities as a cover for contracting financial loans.

  6. Contribute to achieving high efficiency in directing resources to the most profitable areas; this is accompanied by economic growth and prosperity. This requires the availability of several features in the stock market, which can be summarized as follows:

    1. Efficient pricing: meaning that prices reflect all available information.

    2. Operational efficiency: meaning that the cost of transactions is minimized compared to the return that these transactions can yield.

    3. Market justice: meaning that the market provides an equal opportunity for everyone who wants to conclude deals.

    4. Safety: It means the necessity of providing means of protection against the risks that result from the relations between the parties dealing in the market, such as the risks of fraud, fraud and other unethical practices that some parties intend.

  7. Determining the prices of securities realistically based on sufficient knowledge and a high degree of fairness.

  8. The prices of securities are determined through negotiation or auction (public auction), which more closely reflects the opinion of dealers on the appropriate price of the security under the prevailing market conditions, in addition to what companies and economic authorities do in publishing all data related to companies, their instruments, profits and financial positions; This prevents creating an unrealistic price for the security. This price represents the best price for the seller (highest bid) and the buyer (Lowest Offer) [15].

  9. A stock market is an important tool for evaluating companies and projects. It contributes to increasing investors’ awareness and insight into the reality of companies and projects, and is judged on success or failure.

  10. The drop in stock prices for a company is conclusive evidence of its lack of success or the weakness of its financial position; which may lead to making some adjustments in its leadership or in its policy in the hope of improving its position [15].

2.3 The components of international financial markets and financial capital flows

The money market requires the availability of several basic components to become an effective market capable of achieving the objectives for which these components are established, which can be summarized as follows:

  1. Adopting a liberal economic philosophy based on confidence in the capabilities of market forces to move economic activity in light of considerations of economic efficiency and rational behavior of both producer and consumer, exporter and importer and other individuals and organizations based in economic activity, that private capital plays a leading role in accumulating private savings And re-allocate them to the faces of economic activity that achieve the highest possible rate of return in light of the lowest possible level of risks [2, 10].

  2. The necessity of having a sufficient volume of savings, both national and foreign, offered and at the same time corresponding to sufficient demand for them so that there is no surplus in demand without being matched by the available supply of savings that undertakes to cover it, or an excess of supply that does not have the demand capable of employing it in the various financial investments [11].

  3. Existence of sufficient investment opportunities capable of attracting short and long-term capital offered and looking at the same time for attractive investment opportunities.

  4. Finding effective legislative and regulatory frameworks through their flexibility and ability to continuously develop and adapt to national and international economic changes.

  5. Availability of effective and diversified banking and financial institutions to play their required role in accumulating national and foreign savings on the one hand and creating and generating investment opportunities and preparing them in the form of investment projects and promoting them on the other hand.

  6. These financial or banking institutions play a prominent role in the mediation process between savings and those who join to find the required convergence between the supply and demand for savings and the presentation and demand for investment opportunities.

  7. Having a good and diversified portfolio of securities that contains many different advantages to be able to attract dealers in the financial market and at the same time provide them with great opportunities to choose.

It is also noticeable that the term “Internationalization” has spread in international securities after (H2), due to the huge measures that were followed in the major advanced industrial countries to liberate the movement of capital from the restrictions imposed on them and the great role played by the information revolution, which made the international financial markets more like with a single financial village with interconnected parties and able to find diverse and attractive investment opportunities for those wishing to invest around the globe.

In addition to opening the door for international commercial and specialized banks to find the appropriate purpose to add the money that they accumulated in particular in the period (1947–1990) as a result of the phenomenon of accumulation of petrodollar surpluses, and the great development what the European currency markets witnessed is in addition to the success achieved by the central banks of the advanced industrial countries in controlling the inflationary phenomenon in the era of the eighties, thus opening the way for these countries to adopt flexible interest rate policies that enabled them to reduce their interest rates, which in turn contributed to an increase in the demand for high-quality securities [6, 19].

Fixed interest rates (International Bonds) and this development has created great popularity in the field of international financial investments and prepared the way for capital movements across international borders, in addition to the great role played by the policy of reducing and removing restrictions between international markets [20].


3. Investing in international financial markets and financial capital flows

3.1 The mechanism of dealing in international financial markets and financial capital flows

Securities are issued either denominated in real currencies traded in a country, and this is mostly either “Arithmetic” or “Compound” monetary units that are not traded, but are used only as units of measurement, because of the advantages of real currencies to avoid the fluctuations that may occur on the currency that may it harms the interests of dealers in the financial market and is dealt with in these markets according to indicators in the light of which the trends practiced by investors, speculators and financial analysts in the financial markets are determined which are:

  1. Economic indicators: The movement of stock and bond prices in the financial market is affected by economic indicators, which in turn reflect the validity of speculations and expectations in the market, such as the case of announcing a huge financial budget or an ambitious investment approach, which means expecting prices to rise in general, and pumping additional funds. The market would reflect on the state and conditions of stock exchanges in developing countries, and so on in adopting statistics on industrial production, national product or disposable income as indicators in stock markets in developed countries [4].

  2. Monetary and financial indicators: They are one of the most important indicators to know price trends in the financial market, as the rise in interest rates leads to investors moving towards depositing in banks, and selling their shares in the market, so the supply of them increases and their prices decrease, while the funds are heading towards the financial market in the event of falling prices interest in banks or transferred to the bond market [6, 21].

  3. Increasing the money supply, whether in the economies of developing or developing countries, leads to a rise in stock prices, and conversely, a decrease in the growth rates of money supply will lead to a decrease in stock prices, and therefore the intervention of central banks in expanding or reducing the money supply is reflected in the shift in money prices, the interest is to rise or fall, and then influence the price trends in the financial market accordingly [21].

  4. Trading volume in the stock exchange: The number of shares and bonds traded in the financial market determines the strength of the market and the expectations of its rise or fall in the future, as the intensity of trading volume means the optimism of investors and their willingness to invest in the market and the subsequent rise in prices as a result.

  5. The individual nature of these markets, makes the investor face strong parties in the aspect of issuance and marketing, represented by public bodies and major companies, which can enter the international market [2].

  6. It is difficult for the investor to have sufficient knowledge of the prevailing conditions in the markets in general, as well as the conditions of the bodies in which he invests his securities. Often the investor relies in this regard either on a few general information or on the advice and instructions of stock traders. This is if we know that the majority of investors resort to the services of specialists due to the conditions and fees imposed by them that are rarely related to the quality and effectiveness of performance.

  7. Securities holders, especially bond holders, need to tighten their protection not from risks in the normal market resulting from changes in interest rates, exchange rates or credit of securities, but rather the risks resulting from the failure of debtors (especially in the bond market) to perform their obligations, represented by the difficulty of obtaining On foreign currencies when paying or delaying the payment of interests and installments, or imposing exchange control or imposing taxes, such as taxes on transfers and so on.

Therefore, if the market achieved progress or supply and was not accompanied by heavy trading, then the prices remain unchanged or tend to decline due to the relative stagnation of participation, and thus investors are directed towards liquidating their investments as prices continue with downward trends. Hence, it becomes clear to us that the intensity of trading and the increase in prices is what generates the demand, which is followed by the occurrence of successive increases after that; therefore, demand is not the only thing that leads to an increase in prices in the financial markets [22].

Thus, this market has characteristics that differ from what it is in the investment markets and consumer goods markets, which reflect the effectiveness of the investment process mechanism in those markets, represented by the following [23]:

3.2 Analysis of the reality of Investment in International Financial Markets and Financial Capital Flows

The global economy, in view of the increasing importance of capital in the financial services industry with its banking and non-banking components, has become a tool driven by indices and symbols of global stock exchanges (Dow Jones, Nasdaq, Nikkei, DAX, Kick) which leads to the transfer of in-kind wealth from one investor’s hand to another. Without hindrances or even across geographical borders, where the continuous movement of capital looking for a profit in front of its accumulated surpluses, providing guarantees to the owners of these funds and diversifying them through the mechanisms provided by financial instruments and controlling the different markets [24].

For example, World Bank reports indicate that the volume of transactions at the global level reached about (300) billion dollars for the (Euro-Dollar) market in one working day, which is approximately (75) trillion dollars per year, while the volume of trade in the sector did not exceed Goods and services (3) trillion dollars until it became a threat to the economies of the world [6].

The experiences of the nineties of the last century proved that this movement of huge amounts of capital often led to the occurrence of costly financial crises and shocks (in Mexico, the Asian tigers, Brazil, Russia) represented in [23]:

  • Risks arise from sudden fluctuations in investments in international financial markets, especially short-term ones.

  • Risks of exposure to speculation in the market.

  • Risks of flight of national funds.

  • Risks of entering dirty money (Money Laundering).

Weakening control over national policies in the areas of monetary and fiscal policy.

Thus, the great powers of investment accounted for the wealth and markets of the world, helped by the flourishing of communication networks and the transfer of information provided by the tremendous technical progress in linking global financial markets, allowing investors to respond to developments in the markets in a timely and immediate manner [25].

Because of the phenomenon of monetary inflation, which is one of the structural characteristics of modern economic life in various countries of the world, which in turn led to the rise in the costs necessary for investment, in addition to the need for capital to expand its activities and the inability of savings on the other hand to meet the volume of required investments, there is no other way but the financial markets to obtain the necessary funds to meet that demand for the implementation of investments, through which transactions are conducted through the investors selling their shares or increasing them by buying [26].

Thus the financial market became active as a new financial tool, and the accompanying calls for the abolition of legal and legislative regulations that stand in the way of promoting market economies and the practice of banking and financial operations on a large scale, and then accelerating the movement of capital flows across borders, which created an expansion in the scope of dealing in different types of securities, turning parts of the volume of traded capital into speculation globally in the currency markets, stock exchanges, securities, stocks, bonds and short sales, which made dealing in the international financial markets requires a continuous review of the concepts, effects, and even strategies followed [27].

Often, dealing in these markets is within a deliberate process driven by capitalist forces to achieve their interests, including trade liberalization and opening international markets to the free movement of goods and services through the main players. These international markets that lead investment operations, sales procedures, brokerage, and financial speculation [28].

3.3 Large transnational corporations and international financial markets, financial capital flows

In the wake of the economic boom following the end of the Second World War, the phenomenon of the spread of the so-called multinational corporations or transnational corporations (most of these corporations are American, European, or Japanese) has emerged [1].

Big companies seek to support and promote the global free market, where the largest and strongest player in the image of giant multinational corporations and major players in international financial markets. From here, the art of the game becomes clear in the international financial markets through these companies and as follows:

  1. The escalation of trends and movements of Western capital and companies of this type with the help of the communications and information network, illustrates the huge sources of power that allow giant monopolies to penetrate global markets, including stock markets through movements, activities and interactions to increase their ability to maneuver in dealing in these markets by following the method of encouraging speculation in the stock exchanges on stocks and bonds in order to operate the huge moving financial masses of money with banking assets, whose value exceeds the total value of world trade by at least thirty times (of visible and invisible goods and services), and this means that if the total value of merchandise trade at the level of the world is three trillion dollars (as we have shown), the volume of investments offered in the field of stock exchanges, bonds, and electronic money or credit cards that they deal in in those markets is not less than (100) trillion dollars, which in turn are far from the control of the richest central banks in the world [6, 29].

  2. The movements and activities of Western commercial, industrial, information and media monopolies with terrifying capabilities were taking place in the direction of an attempt to cross or cross borders and affect the national sovereignty of countries and societies and what is known as (Trans border Trends), such actions and in the manner dictated by these companies, to facilitate the tasks of the movements of the great powers to dominate the economies of the world through major companies as one of the important methods for controlling the flows of capital and investments, and controlling the tracks of the stock markets in the world, including the stock and bond markets; In this case, it is considered the beneficiary of these markets, especially with regard to the capital invested in financial operations, which is reflected in the work mechanism in the international financial markets, which is most powerfully reflected in the giant transnational companies and players in the international financial markets [6, 30].

  3. The role of currency laundering operations (Money Laundering), money laundering means the investment of illegally obtained currency by a third party to obscure the identity of its source, knowing that the source of these funds is a criminal act. These funds are exploited in the areas of accepting deposits, bank transfers, issuing bank payment methods, guarantees, and financial obligations Trading for third parties or for own account, external transfer, cash brokerage, cash portfolio management, owning and managing financial bonds, and other banking activities [6]. Preliminary data indicate that there are (−0.9) trillion dollars of world production spent in what is known as the “Shadow Economy” or transactions that are not subject to taxation and are not recorded in the official books, which includes the unrecorded legal income of cash-paid transactions from the unrecognized income side. Legal activities of smuggling, drug and other activities [21, 31].

Money laundering takes place in three stages:

The First Stage: Employing illegal funds in the form of deposits with banks and financial institutions, or buying shares and bonds.

The Second Stage: Concealing the true source of funds by conducting a series of financial transactions.

The Third Stage:Repositioning the illegal money after it has been laundered.

The international financial markets are considered one of the most important areas that enable this type of funds to operate, as it is difficult to follow up, control, or even besiege them in this market due to its integration into the network of traditional financial and banking activities.

Payment via the Internet, and money launderers do not care about the economic feasibility of investment as much as they are interested in employment that allows the return or continuity of money circulation, which poses a risk to the investment climate, especially in the financial markets represented in the stock markets of stocks and bonds, as the movement of money required to be laundered without taking into account profitability within the space of these markets will lead to confusion in the market and promote the process of speculation among dealers in the market and create a state of unequal competition with investors, as the money-laundering process, due to its large amounts, affects interest rates and exchange rates, and this reflects the rapid variation in the prices of stocks and bonds, and its changes, thus falling into the trap of losses, withdrawal from the market, or the bankruptcy of some investors; In view of the large size that laundered money occupies in the international financial markets, especially since there are gangs, networks and international organizations with huge potentials specialized in the processes of creating dirty money, and laundering it - its laundering - thanks to financial globalization through the movement of people, bank transfers and the transfer of capital [21].

The United Nations profits generated from organized crime amount to one trillion US dollars annually and a fifth of this huge amount is re-laundered in the global economy or about (200) billion dollars annually [6].

Among the most prominent of these dealings is what is happening in the field of financial markets and financial institutions that practice secret financial and banking accounts, where money is laundered and laundered through the means of entering into stock and bond purchases (a series of buying and selling operations) and the negative effects of such operations on trading operations, and dealing in those markets and the matter becomes more dangerous if we know that dirty money laundering networks employ a large number of economic and financial legal advisors and brokers to manage and follow up the transactions, especially through financial institutions and (Off Sure) banks that issue forged invoices and end-use certificates to hide the source of these funds, and what follows from the Confusion in the international financial markets as a result of sudden and rapid changes in the prices of stocks and bonds and the value of exchanges in general [32, 33].

This is the state of the international financial markets, financial capital flows and the cases of unequal competition, speculation, and manipulation in investment operations in them, which makes them under the weight of the alarming movements of financial blocs and capital flows and the growing ability of the most powerful actors on the global capital level, to form the empire of monetary capital independent of industrial and commodity capital and thus is done Monopolizing the resources and returns of the international financial markets through investment and speculation operations in those markets [34].


4. The main players in the international financial markets and financial capital flows

4.1 The most important international financial centers and their indicators of the financial capital flows

4.1.1 American stock exchange - New York stock exchange

New York is currently the most important market or international financial center, due to the large volume of capital traded in it, and the importance of pressure and influence exerted by the Wall Street Stock Exchange on the rest of the international financial centers in the world, which increased the importance of the American financial market as well, the situation The dollar’s distinction in the international monetary system [23].

New York emerged as an international financial center after World War II, when in (1954) two-dollar loans were issued to Belgium and Australia, amounting to (55) million dollars, and the New York Stock Exchange developed during this period. In the mid-sixties, long-term investments in foreign bonds amounted to (5.7) billion dollars, and most of them were directed to European foreign banks [23].

In (1962), the total amount of bonds issued by the American stock market reached a record high of (1146) million dollars, and this amount exceeded the sum of foreign loans issued in England, Switzerland, Germany, the Netherlands, and Austria, all combined. In (1972), the volume of trading in the New York Stock Exchange amounted to about (71.2) billion pounds, and this exceeds the total trading in (London, Tokyo, and Zurich) combined [16, 35].

During the period (1981–1987), the foreign capital employed in the American financial markets amounted to about (920) billion dollars, the majority of which was invested in US government bonds - to contribute effectively to covering the ongoing public budget deficit.

The American stock exchanges have become the most important markets in the world, as the value of the total financial investment tools registered in the American financial market represents from 30–60% of the value of capitalization in global stock exchanges, whether for stocks or bonds [36].

4.1.2 Characteristics of the US financial market

The rules of dealing in the New York Stock Exchange and the American stock market require that all sales and purchases be done by public auction and with a loud and audible voice, hence the prohibition of secret exchanges completely, in addition to the fact that the broker may not complete the purchase or sale requests received by him from His customers without displaying them in the hall by way of public auction [37].

American financial markets are characterized by a set of characteristics, the most important of which are [17, 38]:

  • The presence of a sophisticated and efficient information system;

  • The superior ability to continuously communicate with all financial markets in the world, by linking them to a multilateral electronic system;

  • Allowing the sale of securities to foreigners, either through the secondary market, or by concluding transactions outside the official financial market;

  • Continuous development and modernization at the level of American capital markets in order to achieve high efficiency.

4.2 British stock exchange - London stock exchange

London is the most important European financial center and ranks second after New York in the world. The activity of the London Stock Exchange dates back to the seventeenth century (17th century) when the British government and some major commercial companies began to raise capital through the sale of shares and bonds. With the increase in the volume of financial investments, a type of dealer appeared that plays the role of mediation between sellers and buyers of securities, and stock dealers - after they met in London cafes - moved to a private building to practice their activities [39].

London began to gain its importance as an international financial center during the nineteenth century (Q19) when British overseas investment reached its limits. After the First World War, the fame of the British financial market was affected by the great competition from the New York Stock Exchange, in addition to the negative impact of the economic crisis of (1929) on the role of London [40].

After World War II, London was able to return to the international financial arena by providing loans in Euro-Dollars. The London Stock Exchange plays two main roles, as it represents a source of capital for the British and foreigners, and it is considered a global center for dealing in securities. The British net revenues from financial services witnessed during the second half of the twentieth century, and the following table represents the development of this development during the period (1970–1980) [6, 41].

Statistics and studies indicate that the number of securities registered on the London Stock Exchange is more than (6000) shares, estimated at 50% of the total securities registered in the European financial markets, of which (2000) shares are for international and European companies. This area, because most of the bonds issued in the international financial market are registered in the London market [42].

The London financial market is characterized by a special system related to the means and methods of carrying out operations. It is not an auction market like other international financial markets but rather deals with negotiation and bargaining.

The broker in the London Stock Exchange is limited to mediating between the client and the jobbers, which is similar to the wholesaler in the commodity markets, as the jobber does not deal with the public, but sells and buys securities for his account, even if he works in the name and under the responsibility of one of the stock brokers [36].

The jobbers are a group of members of the London Stock Exchange, where they perform the function of “Market Makers”, and their number is thirteen (13) traders dealing with stockbrokers.

Several characteristics also characterizes the London Stock Exchange, namely [3, 29]:

  • Experience in financial transactions;

  • Stability of the foreign exchange market;

  • Low taxes on stock dividends.

The London Financial Market is also divided into the stock market, bond market, futures market, and foreign exchange market.

The Paris Stock Exchange and the Tokyo Stock Exchange, the Cairo Stock Exchange,and the United States of America Stock Exchange.

4.3 Paris stock exchange

Before the First World War, France played an important role in the international financial market, because the large amounts of capital accumulation and the limited use of it in the productive areas inside France helped French banks to assume their position in financing international trade operations and providing loans to other countries. The French financial market began to gain more importance during the second half of the twentieth century, due to the high rates of economic growth and capital accumulation within France [36, 43].

This is despite the fact that the Paris Stock Exchange faced some obstacles that limited the expansion of its financial activity, such as restrictions imposed on foreign direct investments in France and control over the issuance of foreign securities and loans obtained by French companies from abroad [44].

This is despite the fact that the Paris Stock Exchange faced some obstacles that limited the expansion of its financial activity, such as restrictions imposed on foreign direct investments in France and control over the issuance of foreign securities and loans obtained by French companies from abroad. In the French financial market, most dealing is done in bonds, and the government sets the conditions and criteria for registering foreign securities and the way they are traded in the market. That is why French financial markets are known as governmental management and decision [45].

4.4 Tokyo stock exchange

The Japanese financial market occupies third place after the financial market of America and the financial market of Britain, and the first financial markets were established in Japan in (1878 AD), namely the “Tokyo” market and the “Osaka” market. The Japanese financial market played an important role in the process of financing the industry resulting from the wave of economic development in Japan during the nineteenth and twentieth centuries, which made the Japanese government interested in developing and modernizing the Japanese financial markets, taking advantage of the American experience in this field, until the Tokyo Stock Exchange became one of the largest Competitors of the New York Stock Exchange in the second half of the twentieth century [35, 36].

Among the most important characteristics of the Japanese financial market [1]:

  1. Diversity of investment tools traded in it and low risk;

  2. Great openness to the registration and trading of securities of foreign companies;

  3. The development of information systems and the ability to continuously communicate with international financial markets;

  4. Characterized by high liquidity.

4.5 Cairo stock exchange

It occupies the first place in the Arab world, with its experiences in this field, as it is the oldest Arab stock exchange, and alongside the Palestinian stock exchange, it is considered the most important and active Arab stock exchange [12, 13].

The most important indicators used in international financial centers:

  • The movement and direction of stock prices in the stock markets is measured through a number of indicators. Each index includes a group of companies that reflect the market movement, its degree of efficiency, and the rate of increase or decrease in share prices.

  • The most important indicators that characterize international financial centers are the Dow Jones Index and the Standard & Poor’s (500) Index in the American financial market, the Financial Times Index in the British financial market, the Nikkei index in the Japanese financial market, in addition to the CAC (40) index in the French financial market.

4.6 United States of America stock exchange

In (1887) Charles Dow developed two of the most widely used indexes, the Industrial Corporations Index, and the Railroad Industries Index, which includes (20) of the largest such corporations in the United States of America. These are now known as the Dow Jones Industrial Average and the Dow Jones Transportation Index [13, 14].

  • The Dow Jones Index is one of the oldest and most famous indicators used in the financial markets, as it was first published in the Wall Street Journal on July 3, (1884).

  • This index includes three sub-indices and a major index that represents the entire financial market.

  • Standard & Poor’s (500) (S&P 500): contains five hundred securities representing 80% of the market value of shares traded on the New York Stock Exchange (400) industrial companies, (40) public utility companies, (20) transportation companies, (40) companies in the field of finance, banking and insurance.

  • England (FT-30): This index brings together thirty of the most important securities on the London Stock Exchange.

  • (FTSE-100): the most popular index, containing (100) securities representing 70% of the total stock exchange capitalization.

  • France (CA-C40) Index: It consists of (40) securities of the most important companies on the Stock Exchange Paris.

  • Germany (DAX) Index: contains (30) securities representing 70% of the stock market capitalization

  • Japan Nikkei Index: Contains (225) securities representing about 70% of the capitalization of the Tokyo Stock Exchange.

4.7 The European dollar market “Eurodollar”

The reasons for the emergence of these European dollars go back to the (the 1950s), when some countries, because of the conditions left by the Cold War between the two camps, deposited their dollar assets in Western European banks to avoid the (USA) from freezing them if they were employed in them [21, 22].

4.7.1 The concept of the European dollar

The European dollar is the same as the (US) Dollar, which is in the form of deposits in banks outside the United States of America. It is necessary to know another idiomatic expression, “Eurodollar”, which originally meant dollar deposits in European banks, including branches of American banks in Europe as well [27, 44].

4.7.2 Characteristics of the euro-dollar market

Deposit operations with banks in Euro-dollars have led to the emergence of a new international financial market that is completely different from the national markets, and its operations are conducted in dollars through the intermediary of banks spread outside the (EU) [21, 35].

4.7.3 The most important characteristics of this market

  1. The Eurodollar market, as part of the international financial market, does not have specific national borders, and therefore it is not subject to the control of any country or system. The supervisory authorities in a country are unable to influence the activity of this market effectively, and their capabilities are limited in this area with their foreign currencies.

  2. This market is based on deposit and lending operations, and therefore it is considered a market for loaned funds.

  3. The very large and growing volume of the Eurodollar market operations greatly affects the monetary and credit conditions of the entire capitalist system.

  4. The affiliation of creditors and debtors in this market to different countries.

  5. This market enjoys relative independence and a special interest rate policy that is completely different from the internationally applicable rates.

  6. The Eurodollar market consists of two parts of operations:

    • Interbank transactions: They take the form of current and term deposits with certain interest rates.

  • Interbank and other dealers’ operations: When banks make loans to their customers.

4.7.4 Reasons for the development of the Eurodollar market

The emergence and development of the Eurodollar market are due to several reasons, the most important of which are [33, 34]:

  • Strictly limiting the credit interest rates paid by (US) banks to their depositors by the central banks or the so-called (K) or (Q) rule, which led to a large number of non-resident dollar deposit holders and some residents investing their money outside the country (MI) to evade the provisions of the aforementioned rule, and thus obtain higher interest rates in Europe.

  • The chronic deficit in the (US) balance of payments, as well as the method of financing this deficit.

  • The caution imposed on British banks since (1957) by using the pound sterling as a foreign currency for transfers, and for conducting monetary transactions between countries outside the sterling area, has forced the banks in London to replace the dollar with the sterling and thus obtain all the necessary dollars from outside England.

  • The (USA) interest equalization tax has reduced the demand for loans by (non-US) residents (due to the high cost of these loans), forcing them to resort outside the (USA) to obtain the necessary financing.

  • European insurance companies working for the (USA) found that it is in their interest to maintain their dollar reserves in the European dollar market, which brings them profitability and great financial returns.

  • It should be noted that the Eurodollar market originated in the European foreign exchange market, as the latter includes several currency markets.

4.8 The European bond market

The financial services business in Europe as a whole is undergoing fast transformations because of numerous primary driving forces. The most obvious example is (EMU), but liberalization continues apace, and technology is entering an exponential transition phase that may well allow for substantial disintermediation of many aspects of the financial system. The paper’s first section provides an outline of the specific changes that appear to be most likely to alter the market structure within which the (ECB) will have to operate its monetary policy. Naturally, the first set of modifications were those necessary to run a monetary union with a population of 300 million people [16, 34].

Several other fundamental causes have been at work in the background at the same time, with the full implications only becoming apparent in the medium term. Nonetheless, the implications have the potential to have a significant impact on monetary policy implementation; therefore, they should be closely monitored [46].

The (ECB’s) Technical Actions the (ECB) made several technical steps as part of its (EMU) preparations to ensure that its monetary policy could be implemented effectively. Some of these improvements may have happened spontaneously over time, as technology became more widely available, causing cost-cutting pressures to force market participants to adopt these techniques. Nonetheless, (EMU) sped up the following critical steps [17]:

  1. Cross-border payments in real-time were required. Market players must be able to arbitrage any geographical price disparities in money to create a unified pan-European money market. The efficiency of payment systems will determine the perfection of that arbitrage, so large amounts of money will need to be moved quickly. A real-time system was the logical choice if central banks wanted to avoid potentially enormous credit exposure to payment banks – and technology had just made it possible. As a result, the target system was created [38, 47].

  2. Once the decision to avoid central bank credit exposure had been established, real-time securities settlement became a need. The ability to settle very large volumes of securities flows immediately was required to carry out a monetary policy via securities transactions. Furthermore, the requirement for collateral movement as part of the payment mechanism suggested the same thing. The starting pistol for a major re-structuring of the entire settlement chain had been fired once the (ECB) decided it would require these settlement systems to be constructed for the limited purposes of monetary policy execution. Furthermore, the (ECB’s) depositary minimum norms underscored the need for action. With this limited process in place, market players were bound to apply risk reduction and cost savings to all aspects of their business [38].

  3. The creation of methods for dealing with the (ECB) prompted a broader expansion in the use of collateral. Tier One (high credit quality, marketable debt instruments) and Tier Two (National Instruments) appear to be broad enough to cover new securities that may emerge when market participants develop new products to appeal to (pan-EU) investors. The significance of the (ECB’s) eligibility rules, however, should not be overstated. In March, the (ECB) had 600 billion euro in total collateral out of a pool of 6300 billion euro in eligible assets (2000). By a minimum issue size of 3.000 million euro at the end of March, Salomon Smith Barney forecasts a size of 500 million euro in (2000) markets that are easily accessible to institutional investors (2000). Given the broad eligibility criteria, it would be astonishing if a newly issued asset was not (ECB) eligible, and there appears to be a little price premium for “eligibility” at issue – or even in secondary trading, even in the repo market itself [48].

  4. Improving collateral’s legal certainty is an obvious step, and the Giovaninni Group published a paper on the subject in October (1999). It advised Member States to employ a broad interpretation of Article 9 (2) of the Settlement Finality Directive so that the protection of legal certainty was not overly limited to the ECB and payments systems. Instead, they should eliminate legal risk for all (EU) settlement system participants [49].

  5. The (ECB’s) basic duty of monitoring payment networks includes retail cross-border payment systems. In late (1999), a new Directive was enacted for retail systems, although it may not be enough to produce cross-border systems that are as efficient (fast and cheap) as domestic systems (2002) [34].

  6. Citizens will be unimpressed if they are unable to move “Single Money” around to take advantage of pricing differences. Indeed, people may wonder what the aim of a single currency was on a technological level. Any resulting loss of popular enthusiasm for “Europe” at a time when (IGC) approval is on the table to allow enlargement to take place might have major political ramifications [50].

4.9 Issuance of bonds that have been underwritten

The increase in corporate issuance was a prominent trend in the new euro markets, and it is made up of various factors [34, 45]:

  1. The (M&A) tsunami has resulted in a substantial increase in the need for finance, but it is unclear which came first: the chicken or the egg! The rules of the game have altered since Olivetti was able to raise funds for its offer for Telecom Italia, and Vodafone’s hostile bid for Mannesmann could result in a new round of bond issuance. Vodafone’s 30-million-euro bank facilities are estimated to be (364) a day, thus a large portion of it will need to be refinanced over a longer period. If European (M&A) activity maintains its pace of 1200 billion-euro announcements in (1999), and only 10% is refinanced in the bond market, it would equal the entire corporate bond issuance in that year (1999) [8].

  2. In the investment-grade sector, (US) corporations exerted a significant effect last year, owing in part to (FAS) 133, but also to finance companies’ aim to extend their investor base. Both of these trends are likely to persist this year. We feel that issuance relating to (FAS) (133) may easily quadruple.

  3. Asset-backed securities (ABS) denominated in the euro have just begun to scratch the surface of potential issuance despite reaching 43 billion euro in (1999). The potential scale of the market that could result from the securitization of European credit is most obvious when considering the second-largest component of this volume – banks issuing Collateralized Loan Obligations (CLOs) to reduce their need for regulatory capital. The 9 billion euro issued in (1999) only amounted to less than 0.5% of the banking system’s aggregate balance sheet [6].

  4. Finally, the high yield market has developed very strongly as European institutional investors have stepped up their credit research capabilities much faster than many observers recognize. During the year, 7 billion euro was issued and more than half of that was in the fourth quarter alone – driven by the telecom/cable companies. Therefore, the capital markets are financing a vital part of Europe’s technological development [23].

4.10 Markets for government bonds

  1. The success of the Euro (MTS) – the electronic broking system established from the platform used to trade Italian government bonds – was possibly one of the most significant breakthroughs in (1999). It was launched in April and has quickly expanded to include (9) of the Euro-11 government markets, with a market share of around 30–40 percent of inter-dealer volumes. The decision in December to incorporate (P) fandbriefe as an initial move into the non-government sector - but still focused on the liquid component - underlines this success. A minor tightening of the spread on 10-year Portuguese bonds after their benchmark bond was listed on November 17 exhibited enhanced investor trust in liquidity and pricing transparency [3, 49].

  2. Furthermore, Euro (MTS) has announced the availability of a service for arranging anonymous repos using the London Clearing House as the principal counter-party. These events highlight the growing relevance of liquid benchmark issues and the potential to construct a secure money market that comes with them. The need to ensure legal certainty for this type of business across the (EU) is a vital component, underscoring the necessity for a broad interpretation of the Finality Directive [30, 42].

  3. Throughout (1999), debt re-structuring was a constant feature as debt managers worked to increase the liquidity of their issues. For example, the Dutch Treasury said in June that debt re-structuring was a constant theme during (1999), as debt managers tried to build up their liquid benchmarks to a typical level of 10 billion euro through a 19-billion-euro exchange offer program [42].

  4. Government bond markets continue to evolve rapidly as debt managers respond to the new environment of low issuance and rising technology. Finland led the technological way with an 11-year bond that was partly sold via the Internet.

  5. Bond issuance decreased by 21% in the first quarter, and we estimate a further drop of 12% in the second quarter. However, we expect just a little decrease in issuance for the year as several states alter their financing patterns to longer maturities [30].

  6. As a result, issuance in the 30-year sector is likely to increase by roughly a third. Now that there is a defined yield curve in euros, more debt managers may be willing to experiment with such extended maturities in the future. The inversion of yield curves in the (UK) and now the (US) demonstrates actuarially driven investors’ demand for long bonds. The euro curve is already flattening, which may pique the interest of debt management. Surprisingly, the issue of 30-year bonds in Euroland would account for about a third of the whole portfolio of long-dated (UK) government bonds, whose yield pattern has been severely warped by significant pension fund demand. This has resulted in minimal government issuance, even with the help of the (UK) government’s fresh borrowing plans. With the introduction of the euro, Europe’s capital markets can be consolidated into a single, global size market that can facilitate the movement of savings to a wide range of end-users [34, 37].

As the intermediary, the financial services industry has both a difficulty and an opportunity because of the same combination of increased savings flows and new technologies. The speed with which the European sector is consolidating shows that the transformation is already begun. However, because a merger takes time to complete, there may be a period before the new services are put out and advertised to the final client [51, 52, 53].

Other Stock Exchange operations could be eliminated, leaving only the certainty of settlement as the most important activity. Shorter settlement durations (eventually shifting to real-time) are lowering even that role as the scale of settlement risk grows. One strategy to change is the rise of clearing houses, such as for futures exchanges [33].

Trading functions must continue to be carried out by suitably funded and regulated exchanges, clearinghouses, and financial intermediaries as more exchanges become computerized and distant trading becomes available. This is critical for the financial markets’ systemic stability. Allowing unregulated and undercapitalized software or technology firms to supply important procedures in electronic securities transactions (for example, trading software or electronic links) introduces new dangers [54].

By offering asset management services as an “institutional investor” or as a direct execution agent, the financial services industry is attempting to position itself as this intermediary. Nonetheless, as traditional Stock Exchanges compete with Over The Counter (OTC) traders and Alternative Trading Systems, the execution infrastructure is changing dramatically (ATS). Electronic Crossing Networks are becoming more common (ECNs) [36].


5. A comparative analysis of the effects of the global financial markets and global financial crisis on Arab economies

Arab economies were exposed to the global financial crisis and the consequent stagnation in the economies of the majority of developed and developing countries during the years (2008 and 2009) [2].

The main channels through which the effects of the crisis spread to the Arab countries varied, according to the nature of their economies, the degree of openness and their connection to the global economy. For analysis, the Arab countries, which are characterized by financial systems, can be classified into three groups. The first group, (Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait), which is the Gulf Cooperation Council (GCC) countries, is open and trade with high exposure to global financial markets, and its close connection with both the global financial system and global markets for commodities, especially oil and gas Petrochemicals were the main channels for the global crisis to spread to, so the local financial markets in them are not directly linked to the global markets, except for their economies [4].

As for the second group, (Algeria, Sudan, Libya and Yemen), their economies depend on oil revenues, and therefore global demand and global oil prices affect the financial policy significantly. The practices followed in these countries and keeping with the global economic cycle, that is, government expenditures rise with the increase in oil revenues and decrease with the decrease in those revenues, in most of those countries [4].

They are countries in which the banking and financial sector depends on domestic lending resources, and thus the third group (Palestine, Jordan, Tunisia, Syria, Lebanon, Egypt, Morocco and Mauritania) whose economies are not directly affected by the fluctuations of global financial markets [4].

External shocks, on the other hand, are communicated to their economies through their tight trade ties with developed country markets and their key trading partners in the European Union and the United States. In terms of commodity transactions, these countries’ exports are heavily reliant on developed-country markets. This is in terms of service transactions like tourism receipts, worker remittances, and foreign direct investment flows.

The fluctuations of the economic cycle and growth rates in developed countries, in light of the stagnation resulting from the crisis, lead to the risks of slowing growth in the third group countries, through the decline in the performance of their export sectors with high exposure to the markets of developed countries, and the decline in financial flows to them through the decline in revenues and the volume of tourism and remittances Overseas workers and foreign direct investment [10].

Regarding a comparative analysis of the effects of the crisis on Arab economies according to the three groups mentioned, the extension of the crisis is attributed to two main things, the first of which is financial factors related to the degree of exposure of the banking and financial sector in the economy to global financial markets, and the second is the commercial factors that are related to the main trading partners of Arab countries [11].

5.1 First group countries

The most important conduits for the crisis to extend to the economy of the Gulf Cooperation Council countries were financial factors connected to exposure to global financial markets. The (GCC) countries saw a boom in financial resources in the years leading up to the crisis, owing to large increases in oil income and foreign capital flows to finance significant projects in a number of these countries, as well as an expansion of bank credit to the private sector.

The financial surpluses of the (GCC) states shrank, as did the cash liquidity of the banking and business sectors, as well as the outflow of foreign financial flows, which entered the Gulf financial markets for speculative purposes, and as a result, investor confidence declined.

These circumstances coincided with a lack of liquidity in global markets, leading several (GCC) countries to reduce their reliance on external financing for major projects in their countries, as well as the fact that many loans owed to international financial institutions during the crisis needed to be refinanced, resulting in several (GCC) countries reducing their reliance on external financing for major projects in their countries. Several public and commercial sector enterprises and institutions were at risk of being reinstated (as happened in the Dubai debt crisis) [8].

The rescheduling of outstanding debt, the rise in financing costs, and the fall in investments in financing real estate development projects and the purchase of real estate projects have all contributed to the postponement of many real estate development projects. According to international reports, the total projects that were under implementation at the end of (2009) were expected to be around $575 billion, compared to the entire projects that were under implementation at the end of (2008), which were anticipated to be around $5.2 trillion (2008) [9].

This resulted in a drop in local demand for real estate, as real estate values fell, significantly affecting the value of real estate assets held in Gulf banks’ investment portfolios. Because of these developments, the climate of uncertainty grew, and commercial banks implemented risk-reduction and capital-base-supporting policies, prompting banks to tighten lending conditions, resulting in a dramatic drop in bank credit growth [8, 9].

Declining growth in the non-oil and business sectors, also confirmed by the decline in the money meter (money and quasi-money). After the money stock recorded a growth rate of about 10 percent in the period (2002–2005), its growth accelerated during the economic boom period (2006–2008) to reach about 19 percent, but the growth rate of the money stock declined sharply after that and until the end of (2009) [4].

The repercussions of the global crisis were evident in the wake of the bankruptcy of the investment bank (Brothers Lehman) in September (2008), as global stock market indices declined as a result, and the impact was evident for the stock markets in the (GCC) countries. Losses in the market value of the Gulf markets are estimated at 41 percent or more. The equivalent of $400 billion during the period September–December (2008). The Gulf stock market indices were subjected to several fluctuations, and the Gulf stock market contagion with the global crisis became visible. (P500 & S) Before and during the crisis the trend of the correlation coefficient shifts from an inverse relationship before the crisis to a parallel (Direct) relationship during the crisis [8].

Gulf banks, on the other hand, were able to post reasonably solid financial performance towards the end of (2009), after absorbing some of the crisis’ losses. As a result, the banking sector in all GCC countries maintained high capital adequacy rates before and during the crisis, and the increase in non-performing loans as a percentage of total loans had no significant impact on the banking sector’s financial results at the end of (2009), as the sector achieved net profits, albeit at a much lower level than before the crisis [4].

The Gulf banking sector has also dealt with the systemic risks arising from the crisis, in addition to the implementation of quick practical measures by the official authorities in the (GCC) countries to support the safety and stability of the local banking and financial sector. Some of these measures came to support the banking and financial sector’s liabilities side, by injecting capital in the balance sheets of banks, as was the case in the Emirates and Qatar, where the value of paid-up capital amounted to 2 percent and 3.7 percent of (GDP), respectively [11].

The monetary authorities in the (GCC) states have provided facilities and loans to the banks operating in them, in addition to the official authorities in Qatar supporting local banks with “Assets”, by purchasing investment portfolios with local banks, whose value has fallen sharply in light of the decline in the Doha Securities Market indices [22, 30].

The total purchase value amounted to about 6 percent of the Qatari (GDP). Supporting the “asset” side of these banks aims to improve the quality of their assets and provide the necessary liquidity with local banks, in addition to restoring confidence in the local stock market. In addition, the Emirates, Qatar and Kuwait took decisions to guarantee deposits with local banks. This is in addition to the monetary authorities in the (GCC) countries in general facilitating the use of monetary policy tools to enhance liquidity in the banking sector by reducing the mandatory reserve ratios [12].

Within the framework of stimulating economic activity, Saudi Arabia took the initiative to implement a plan to stimulate and revive the national economy, by approving investments worth $400 billion over the next five years. It is worth noting in this regard that the allocations for the stimulus program are among the highest allocations in the stimulus programs applied by the Group of Twenty (G20) countries. Several other (GCC) countries have also backed infrastructure spending to boost aggregate demand, which helped support the non-oil sector’s development in (2009), albeit at a slower pace than in prior years [6].

5.2 Second group countries

The local banking and financial sector in the countries of the second group (Algeria, Sudan, Libya, and Yemen) was unaffected by the global financial crisis because it was more closed and not directly linked to it, as (Algeria and Sudan) were not exposed to market value fluctuations due to the small volume of trading and the lack of a stock market in the countries of the group, the number of companies listed in it [4].

However, the economies of the group’s countries were affected by the decline in demand for oil resulting from the stagnation in the global economy because of the global financial crisis. In addition, both (OPEC) members Algeria and Libya reduced their production quotas during (2008 and 2009), in implementation of the (OPEC) decision to reduce production quotas. Because of these factors, the volume of oil exports to the group’s countries declined by 28 percent on average in (2009), compared to a decrease of 2 percent in the year (2008) [51, 52, 53].

On the other hand, the economies of the second category have seen a significant increase in non-oil sector activity, particularly in Algeria and Libya. In the case of Algeria, the non-oil sector grew at a healthy rate, owing to a large increase in the agricultural crop of cereals, as well as the continuation of high public spending on infrastructure development under the National Infrastructure Development Program, and the accumulation of oil surpluses before the onset of the crisis. The non-oil economy in Libya has grown rapidly because of increased government spending on infrastructure projects and increased foreign direct investment in Libya to implement infrastructure and construction projects [4].

As for Sudan and Yemen, the non-oil sector recorded high growth rates, similar to Algeria and Libya during the oil boom, albeit at a slower pace, in light of the availability of oil revenues before the outbreak of the crisis [55].

However, the decline in oil revenues due to the drop in international oil prices had a negative impact on non-oil economic activity. In Sudan, for example, the non-oil economic activity declined from a growth rate of 8 percent during the period (2006–2008) to about 8.3 percent in (2009).

This is attributed to the decline in foreign investments to Sudan, in addition to internal factors, some of which are related to the state implementing Measures to reduce import demand in light of the sharp decline in external reserves resulting from the decline in international oil prices.

5.3 Third group countries

The limited exposure to the global financial markets of the local banking and financial sector in the third group countries (Palestine, Jordan, Tunisia, Syria, Lebanon, Egypt, Morocco and Mauritania) has reduced the direct effects of the global financial crisis on these countries.

However, the economies of the group’s countries are closely linked, the economic activity and demand in the developed countries, in terms of commodity transactions, represented in the concentration of export trends of a number of the group’s countries to the markets of the European Union and the United States, as well as on the side of service and capital transactions represented in remittances of their workers abroad, tourism revenues and the flow of foreign direct investment [4, 6].

Therefore, the contraction in demand in the countries of the European Union and the United States, and the entry of the global economy into a period of stagnation, had a negative impact on the exports of the third group countries, and on the flow of foreign direct investment to them [34].

In general, the local banking and financial sector in the group’s countries was able to avoid the severe negative effects that several emerging economies witnessed during the global financial crisis, because the foreign transactions of local banks in the majority of the group’s countries are subject to restrictions on the freedom of capital flows.

The private sector has specific ceilings for investment abroad to reduce the exposure of its foreign assets to high investment risks, such as what the global financial markets witnessed during the crisis.

On the borrowing side, most of the group’s countries’ banks and financial sectors rely on domestic savings and financial resources. Even before the crisis, the stock markets of the third group countries were unaffected by global stock market fluctuations because the vast majority of local stock market investors are individuals from the group’s countries, with only a small amount of institutional foreign investment in a few high-liquidity markets [31].

However, the developments in the global stock markets since the exacerbation of the global crisis in the last quarter of (2008) negatively affected the stock markets of a number of the third group countries due to the fluctuations in the international markets.

Including European in particular. For example, the trend of the correlation coefficient of the stock market indices of the group countries with the French stock market index (CAC40) shifted from an inverse relationship before the crisis to a parallel relationship during the crisis [2].

In terms of external financing, given the scarcity of global liquidity and the resulting rise in the cost of the loan in global markets, several third-group countries were able to fund their budgets from domestic financial sources, where domestic liquidity grew at a rather fast rate. The government’s borrowing from the local market corresponded with a drop in the growth of bank loans to the private sector, which can be linked to global demand and supply dynamics [4].

Because of the reduction in foreign demand and the decline in global trade, demand for bank lending has decreased. Furthermore, the uncertainty created by the global crisis in local markets prompted commercial banks to adopt a precautionary policy, which entailed not squandering the resources at their disposal to avoid an increase in the number of cases of default and failure to repay, despite the availability of liquidity [21].

The repercussions of the global crisis on bank lending to the private sector were more visible in Palestine, Jordan, and Egypt, which saw a considerably greater decrease in bank credit to the private sector during the crisis (2008 and 2009). Following the implementation of the monetary authorities’ strategy that supports stabilizing the value of the shekel and the dinar versus the dollar, the economy in Palestine and Jordan was subjected to interbank liquidity pressures [4, 21, 31].

The Palestinian and Jordanian financial markets have been affected by the exacerbation of the global crisis since the last quarter of (2008). As for Egypt, the growth rates of bank credit to the private sector were weak before the crisis, in light of the restructuring of the banking sector its assets and reducing the proportion of non-performing loans. With the decline in economic activity due to the crisis, the growth of bank credit to the private sector stopped, recording a negative rate at the end of (2009) [4, 6].

Given the early structural reforms in the banking sector implemented by the third group countries before the crisis’s repercussions, the banking sector in a number of the group’s countries was able to achieve good performance before the crisis by increasing the adequacy of risk-weighted capital and lowering the average ratio of non-performing loans to total loans.

The banking sector in these countries canceled numerous problematic loans whose value was fully covered by provisions, resulting in increased efficiency and profitability in a number of them, as it achieved relatively good returns on assets and shareholders’ equity. In general, the banking sector’s performance in the group’s nations was unaffected by the crisis (2008 and 2009) [4, 6, 21].

However, the economic activity in the third group countries was affected by the decline in external demand, as their exports declined the remittances of workers abroad and the flow of foreign direct investment declined, while the tourism sector witnessed a slight improvement.

The intertwining of the export sector with the rest of the production and service sectors, including the banking sector, reflected in the pace of economic activity in the group’s countries, necessitating the intervention of the authorities in the group’s countries to take quick measures to facilitate the management of monetary policy and increase public spending through economic stimulus programs and revitalization [6, 21].

In this regard, it is possible to shed some light on the efforts made in several countries in this group. In the field of monetary policy, Jordan, Tunisia, Egypt and Morocco reduced the interest rates approved by monetary policy, to urge commercial banks to increase lending to the private sector. For example, the monetary authorities in Egypt reduced the overnight deposit rate six times during the period February–September (2009), bringing the cumulative reductions to 325 basis points [2, 4].

The monetary authorities in Jordan reduced the monetary policy interest rate three times during (2009), by 50 basis points each time. All the countries of the group have reduced the mandatory reserve ratio, opened new lending facilities, provided more liquidity to the banks operating in them, and provided guarantees for bank deposits [6, 21].

In the field of fiscal policy, Tunisia and Egypt implemented a comprehensive package of measures to increase public spending and stimulate economic growth, as represented by investing in infrastructure and education projects, providing support to private sector institutions that generate new jobs and supporting exports by increasing the guarantees available for exports [2, 9, 10].

Palestine, Jordan, Syria and Morocco increased public spending on investment in several development projects.

5.4 Lessons learned from the global financial markets, global financial crisis and the potential for action to restore macroeconomic stability and sustainable growth in Arab countries

The severity of the effects of the crisis on the performance of Arab economies varied. The economic performance of the countries of the first and second groups was affected more than the performance of the economies of the third group, because of the sharp decline in the (GDP) growth of the oil sector in them following the decline in global oil prices. It is worth noting that the growth in the non-oil sector (GDP) was the main driver for achieving growth rates in the (GDP) at constant prices in the first and second groups [4, 9].

Among the lessons learned, it became clear that the swiftness in the authorities in several Arab countries managing the consequences of the global crisis on their economies through the adoption of financial and monetary policies and procedures to address the negative effects of the crisis has succeeded in reducing the outcome of these effects on Arab economies. In general, the authorities were also able to intervene to activate various [10].

The existence of favorable conditions and space for policy alternatives (Space Policy), as well as the production and service sectors of the economy, which allows the employment of required policy tools to restore the national economy. For example, before the global financial crisis, the accumulation of financial surpluses stemming from increased oil income enabled a number of (GCC) countries Gulf Cooperation Council to pump funds into the local banking system and address systemic problems [6, 21].

Policy options were available to the authorities in a number of the third group countries, in addition to the economic reforms that they implemented early in the past years, as a number of the third group countries achieved macroeconomic stability, and the chronic deficit in the public budget turned into a surplus in countries such as Morocco, the cumulative external reserves rose to levels not seen in these economies before [9].

When the crisis hit the economies of the countries in the third group that had implemented economic reforms, some of them rushed to implement economic stimulus programs based on the adoption of expansionary fiscal and monetary policies that allow supporting domestic economic activity and maintaining growth and economic recovery trends without resorting to, for example, implementing a program to correct balance-of-payments imbalances and the required monetary stimulus.

On the other hand, the global crisis slowed the pace of economic reform in several countries that had already adopted reforms in prior the circumstances generated by the crisis led to the postponement of the implementation of new reforms that were planned before the crisis, such as Egypt’s postponement of introducing reforms to the value-added tax system, expanding its tax base, and rationalizing the applicable rates to increase the efficiency of allocating productive resources in the economy [2, 10].

It also concerns the postponement of the introduction of the tax on real estate and the reduction of subsidies for some primary commodities. It remains for these countries to choose the appropriate conditions for the resumption of the process of economic reforms that they have implemented during the past years.

Undoubtedly, other lessons can be drawn from the crisis, but it is important in this context to explore the efforts that can be taken to strengthen the national economy’s resilience in dealing with future crises, and to make recommendations related to economic policy regarding the possibilities of working within the framework of each of the three groups and the expected role of resuming the process of economic reform in light of the recovery of Arab economies from the global markets and crisis [2, 4].

5.5 The possibilities of working within the framework of the countries of the first group

The Gulf Cooperation Council countries sought to mitigate the effects of the global financial and economic crisis by stepping in quickly to pump monetary liquidity, simplify monetary policy management, and boost public spending to stimulate the national economy. The ability of the banking and financial sectors in the (GCC) countries to contain the systemic risks stemming from the crisis has improved because of the government’s support [4].

Despite the lack of bank credit to the private sector, the non-oil economy continued to thrive. Given the projected oscillations in the world economy following the crisis, it is expected that the full recovery of the economies of the (GCC) countries from the effects of the global financial and economic crisis will take some time before they achieve sustainable growth rates.

The crisis exposed the dangers of rapid and sometimes excessive growth in bank lending in some (GCC) countries during the years of economic boom resulting from increased oil revenues, as well as the heavy reliance on foreign financing and the increasing exposure of many Gulf banks’ assets to the real estate and securities sectors, with resorting to the use of hot and short-term funds deposited with them to finance projects and long-term liabilities [7, 8].

Due to its intertwining with the global banking and financial system, the regulatory role of the banking and financial system in various (GCC) nations was also found to be unable to keep up with the rapid advancements in the local banking and financial market.

The consequences of the global crisis, on the other hand, revealed the dangers of the oil sector’s dominance in the national economy and reliance on oil revenues, necessitating a step up in the (GCC) countries’ reform efforts over the last two decades to diversify the economy’s base, increase non-oil revenues, expand the contribution of the private sector to economic activity, and preserve savings and to adopt an expansionary fiscal policy counter to the economic cycle during periods of economic stagnation and mitigate the dangers of reliance on the oil sector with income from oil revenues [9].

To continue the direction of the Gulf Cooperation Council countries to reform the economic conditions resulting from the crisis and restore the economy’s ability to achieve sustainable growth, the banking sector is called upon to restore its role in financing economic development after Gulf banks rebuild their capital bases and get rid of the losses incurred by some banks due to their excessive risks [2, 4].

Likewise, the (GCC) states are called upon to intensify their efforts in developing the regulatory and supervisory role on the local banking systems to keep pace with the rapid developments in light of the intertwining of local systems with the global banking system.

On the economic policy side, there is a need for more coordination between monetary and fiscal policies in several (GCC) countries, using macroeconomic management tools that help slow down the transition of the oil cycle to the economy, in light of the limited independence of monetary policy by virtue of the linkage and stability of a number of Gulf currencies in dollars. In addition, the establishment and development of debt bond markets may help diversify the investment portfolios of investors away from the scope of the traditional role for banks in a way that contributes to enhancing financial depth [4].

To diversify the economy and increase the contribution of the private sector to economic activity, (GCC) states are being urged to improve their economies’ competitiveness by developing financial market regulatory bodies and removing rentier restrictions on practices that stifle competition, as well as attracting local and foreign direct investment that creates jobs and supports the diversification strategy.

5.6 The possibilities of working within the framework of the countries of the second group

The countries of the second group, namely Algeria, Libya, Sudan and Yemen, were affected by the drop in world oil prices and their oil revenues declined, which led to a decrease in the surpluses in the public budget and the current account balance for Algeria and Libya and a deterioration in the deficit in them for Sudan and Yemen. As for the local banking sector in all the countries of the group, it was not affected because it is not exposed to the global financial markets [21].

Which requires continuing to implement reforms aimed at achieving efficiency in the “Fiscal Policy” from the side of public spending to allow it to keep pace with the economic cycle, up and down, and to maintain a sustainable financial position. Sustainability Fiscal, without resorting to making major adjustments in the expenditure components, pain, or the revenue-decreased oil [6].

In addition, non-oil economic activity in the second group of countries requires structural reforms to improve performance by simplifying business procedures, increasing the private sector’s contribution to diversifying the production base and creating productive jobs, and attracting foreign direct investments that include the transfer of knowledge and modern technology and the creation of added value in the national economy.

To strengthen the role of monetary policy in dealing with future external shocks, monetary authorities in the second group are being urged to deepen banking reform by restructuring and liberalizing public sector banks, ending competition between specialized public sector banks and other commercial banks, and subjecting them to central bank standards for maintaining liquidity and exercising lending conditions on clearance [6, 21].

5.7 The possibilities of working within the framework of the third group countries

The minimal exposure of the local banking and financial sectors to global financial markets has helped to prevent the global financial crisis from spreading directly to the economies of the third group. The stalling of global demand, on the other hand, caused a slowdown in the group’s exports, a drop in private sector investments, and a drop in the demand for bank credit. Despite this, the banking sector’s performance in the majority of the group’s countries was unaffected, thanks in large part to the efforts undertaken by these governments.

Countries to reform and liberalize the banking sector, within the framework of comprehensive economic reform programs that they pursued at an early date. These countries have been able to restructure the local banking system, which has led to an increase in capital adequacy rates and a reduction in the ratio of non-performing loans to total loans, while improving the quality of credit portfolios with banks. These reforms also contributed to strengthening the banking sector’s resilience to external shocks. The economies of these countries have been achieved [6, 21].

Average growth rates are estimated at 5.4 percent in (2009), compared to average growth rates of about 6 percent during the period before the global financial and economic crisis, rates that exceed those recorded by many emerging economies. In the field of monetary policy, the monetary authorities in the third group countries have made unremitting efforts to reduce the effects of the global crisis on economic activity by using the policy tools available to them, and the return of this policy has been good on the banking and financial sector with the decline of inflationary pressures in the economy. Countries such as Tunisia, Egypt and Morocco are working to create the appropriate conditions for implementing the Policy Targeting Inflation to achieve price stability [4, 21].

However, the global financial crisis showed the need for the monetary authorities in a number of the group’s countries to continue to deepen the structural reforms of the banking sector, such as continuing to reduce the proportion of non-performing loans and working to implement (Basel II) standards for the adequacy of risk-weighted capital, and to increase banking transparency in front of investors and depositors regarding the risks that may be exposed. It has commercial banks and the strengthening of the supervisory role on the local banking systems to avoid systemic risks [18, 31].

It is also important to continue to pursue and deepen economic reform in the group’s countries to support the resilience of the national economy is facing the new challenges brought about by the global crisis.

In light of the decline in exports resulting from the contraction of external demand and the decline in remittances of workers abroad, the current account balance of the third group countries has deteriorated, and these countries hastened to develop and implement a package of measures to increase public spending and stimulate domestic economic activity [9, 10].

Thus, the budget deficit has worsened and the financial performance indicators that these countries have committed themselves to achieve within the framework of their implementation of economic reform programs have deteriorated.

Despite the high ratio of the budget deficit to the gross domestic product of a number of the group’s countries, the outstanding debt balance as a percentage of the (GDP) was not significantly affected, in addition to the fact that some countries of the group [2, 4].

Other countries in this category were able to finance their budget deficits with a minor rise in the return on new treasury notes by relying on the liquidity available with local commercial banks using the external reserves they had built during the pre-crisis economic boom. Although, international financial institutions expect global demand and growth to recover in the future, continued volatility in global financial markets and uncertainty in developed country economies may foreshadow further negative repercussions in the future [12, 36].

The private sector’s reluctance to risk investing may continue and the growth of bank credit to the private sector will remain weak.

Thus, the government in the countries of the group may continue to pursue an expansionary fiscal policy and countercyclical economic stagnation and to continue the stimulus measures for economic activity, such as providing tax incentives for some production and export activities [2].

However, the adoption of expansionary financial measures may have an impact on the medium-term sustainability of the financial position, necessitating efforts to return to the pre-crisis financial metrics that ensured macroeconomic stability.

As a result, it is necessary to resume structural reforms in the areas of public spending rationalization, financial transparency, and revenue reform, to increase tax revenues and their contribution to total revenues on the one hand, while lowering administrative costs and removing distortions in economic incentives on the other.

5.8 The global financial markets and the interconnection with global financial crisis and Arab economies

The global crisis showed the existence of a link between the Arab economies with each other, as a number of the third group countries Palestine, Jordan, Lebanon and Syria are closely linked to the economies of the Gulf Cooperation Council countries, through exports, workers’ remittances, tourism and foreign direct investment and capital flows [2, 26].

Preliminary data on intra-regional trade for these countries indicate that its value did not decrease during (2009), but the value of remittances of Egyptian workers in the (GCC) countries, for example, decreased slightly 6.1 percent in the same year. As for Gulf tourism to Lebanon, Syria and Egypt only, it continued to grow during (2008 and 2009). As for the Arab Maghreb countries, tourism to Tunisia from the Maghreb countries played an important role in keeping Tunisia’s tourism revenues at their level before the crisis, as the arrival of tourists from Algeria and Libya contributed to Compensating for the decline in the volume of European tourism and thus the revenue generated by it [9, 10, 12].

Finally, it can be summarized that the repercussions of the global crisis on the Arab region indicate the importance of the role that Arab economic integration can play to mitigate the negative effects of global economic crises on Arab economies.


6. Conclusions

The international financial markets and financial capital flows illustrate the need for concerted efforts to enhance the mobilization of domestic financial resources and global financial crisis in emerging markets countries, and to reduce exposure to international portfolio capital and financial contagion. The volume of capital outflows also makes the case for reviving discussions on managing capital outflows and on developing a global financial safety net.

In the end, it can be summarized that the development of the financial market is one of the main keys to achieving long-term economic growth. The financial market can lead to economic growth if it can provide a suitable environment for the optimal allocation of resources and increase the efficiency of capital, as we mentioned earlier.

Therefore, the governments of all countries, including the governments of developing countries, must work to create the appropriate atmosphere to attract local and foreign investments and to enhance interaction the stock exchange.

In addition, the local community, and disseminate information through all available means. An informational and promotional effort must be made to promote the culture of investment in all stocks by the relevant authorities.

Monitoring stock market operations, given those Stocks is a new product separate from itself. The rest of the securities in the stock market, to attract money fleeing from Dealing in traditional tools, as an alternative to them, by providing market indicators Stocks is similar to stock market indices, which activates the trading market, and is reflected in the positively on the issue markets.

The government must be working to follow up efforts in the field of deepening the market, increasing its efficiency and liquidity, and spreading the culture of investment, especially the development of its website.

Paying more attention to the issue of corporate governance rules and standards in the financial markets, which is what keeps us away from falling into financial crises, and leads us to enjoy efficiency and work on diversifying the available tools.

The existence of a stock market with a strong infrastructure based on a set of rules and Clear and specific regulatory and supervisory procedures, and the Governments should make their stock market completely governed by principles and provisions and Legitimacy to avoid falling into crises, it helps it reach higher levels of efficiency.

Urging and working to continue developing the technology infrastructure of the stock exchange to serve all dealers in the stock exchange. The International stock exchanges must keep pace with technological developments to create an efficient stock exchange.

The necessity of establishing specialized educational institutes and training centers and holding conferences and scientific centers International, to qualify the human cadres necessary to work in the emerging financial markets.


7. Policy recommendations

This paper presents an empirical analysis of the impact of the international financial markets and financial capital flows through the period of the global financial crisis on global economic growth and development especially in developing countries such as Arab countries, and dynamics in emerging markets and the Middle East. We investigate the impact on sovereign and bond markets, as well as currency rates and capital flows, against the backdrop of globally interconnected financial markets.

Our research allows us to make a comparison between advanced and emerging economies. Our findings show that international financial markets and financial capital flows have had the greatest impact on global economic growth and development, as well as global financial markets in Europe and Asia, after controlling for a large number of domestic and global financial and macroeconomic factors.

Moreover, outflows of stocks and bonds from emerging markets appear to be directly linked to the international financial markets and financial capital flows given investors’ risk aversion and flight to safety. Sovereign bond markets in emerging market and developing countries appear to be the hardest hit by the coronavirus, compared to the magnitude of the effects on stock prices and exchange rates.

Additionally, while the international financial markets and financial capital flows will eventually recede, our findings show that global markets may face some Long-Term marginal effects.

Our findings show that government-sponsored fiscal stimulus packages, along with comprehensive central bank stabilization measures, have helped to reduce the negative effects of international financial markets and financial capital flows on financial market and capital flow dynamics. In particular, our findings highlight the key role of central banks in stabilizing financial markets globally during the international financial markets and financial capital flows crisis, through interest rate cuts, quantitative easing, and international swap lines.

More importantly, the impact of expansionary monetary policy in developed countries, which helped lower sovereign bond yields and bolster stock markets at home, also extended to emerging and small market countries, particularly about stable capital flow dynamics. This, combined with the influence of global factors such as (EPU) and (VIX), underscores the interdependence of the global financial system, and the impact of developments in the world’s leading financial centers on financial conditions in emerging market countries.

The heightened uncertainty due to the international financial markets and financial capital flows pandemic has clearly affected the financial markets in emerging market and developing countries more harmful than in advanced economies.

However, emerging market economies appear to be strong performers in their policy responses to the pandemic. While fiscal stimulus packages have restored confidence in domestic markets, many central banks in Europe and the Middle East have embarked on quantitative easing for the first time.

Our results indicate that these monetary policy measures were effective in the case of Asian emerging markets, as they supported stock prices. More importantly, these measures also helped stabilize capital inflows.

Furthermore, given the size of bond and equities capital outflows from emerging, small and medium markets, our findings highlight the importance of strengthening the local investor base to be less dependent on international portfolio investments, supporting the findings of [12].



The author extends their appreciation for their support for scientific research at the Palestine Economic Policy Research Institute (MAS) in Palestine to support this research and encourage the author in particular, in addition to that the authors send a special thanks and a great appreciation to the jury staff Reviewers, and to the Editorial Board at IntechOpen.


Conflict of interest

The author has declared that no competing interests exist.


Author’s contribution

The Sole Author Designed, Analyzed, Interpreted and Prepared the Chapter.

Data availability statement

The data and materials that support the findings of this study are available from the corresponding author upon request. Datasets are derived from public resources and made available with the authors. Data analyzed in this study were a reanalysis of existing data, which are openly available at locations cited in the reference section.

JEL classification codes

E22, E44, E58, F32, F41, F62, G01, G1, G15


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Written By

Nemer Badwan

Submitted: November 1st, 2021 Reviewed: January 10th, 2022 Published: March 2nd, 2022