Global Financial Systems

Definition ∞ Global financial systems encompass the intricate network of institutions, markets, and regulatory bodies that facilitate the international flow of capital, credit, and investment. These systems enable cross-border transactions, currency exchange, and the allocation of financial resources worldwide. They include traditional banking, stock exchanges, and payment networks, all operating under various national and international legal frameworks. Their operation is fundamental to international trade and economic stability.
Context ∞ The discussion surrounding global financial systems frequently addresses their stability, efficiency, and susceptibility to systemic risks. The rise of digital assets and decentralized finance (DeFi) presents both disruptive potential and new considerations for these established structures. A critical future development involves the ongoing integration of blockchain technology and digital currencies into existing financial infrastructures, alongside the development of new regulatory approaches to manage these evolving interconnections.