Financial Globalization: Theoretical and Practical Aspects of Capital Market Imbalances

Abstract

Introduction. The article analyzes the main factors of the emergence and development of capital market imbalances during the intensification of financial globalization processes. The basis of financial globalization was the integration of various countries and macro-regions on the basis of common goals for the market development to fulfill the key functions of national economies to provide financial resources. As a result of further liberalization of international capital flows, the global financial system has become a channel for spreading financial instability. Materials and methods. The methodological basis of the study was made up of general scientific and special methods that allow to identify and substantiate global contradictions and current features of capital reproduction. Methods of economic analysis and synthesis, formal-logical method, synchronous and comparative (comparative) methods are used. The results of the study. Based on the analysis of trends in the development of capital markets, systemic contradictions affecting the course of natural processes of national economies financial development are identified. It is shown that the consequence of the disproportionate growth of financial capital is the withdrawal of liquidity from the material sphere - the sphere of production and circulation in the sphere of finance. The theoretical aspects analysis of the emergence of global capital market imbalances is carried out. An assessment of their impact on the global financial system and economic growth is given. It is proved that the negative consequences of economy financialization, bearing geopolitical risks, equally affect all countries without exception. The main result, representing an element of scientific novelty, is the diagnosis of the consequences of imbalances and the accompanying global financial crises. Discussion and conclusion. Persistent negative trends caused by the peculiarities of the process of increasing contradictions between fictitious and real capital, financial and material sectors of national economies, lead to increased systemic risks of the financial market functioning of the globalizing world economy. Against the background of a significant advance in the growth of monetary and loan capital in comparison with the real one, the structure of public capital is experiencing frequent banking and debt crises and the vulnerability of the world economy is growing due to the consequences of capital financialization.