Chapter 7 Polysci 20
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Created by:
tatumsouza on March 8, 2012
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International Financial Relations
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11 terms
Terms | Definitions |
|---|---|
 Portfolio investment | Investment in a foreign country via the purchase of stocks (equities), bonds, or other financial instruments. Portfolio investors do not exercise managerial control of the foreign operation. |
| Sovereign lending | Loans from private financial institutions in one country to sovereign governments in other countries. |
| foreign direct investment (FDI) | Investment in a foreign country via the acquisition of a local facility or the establishment of a new facility. Direct investors maintain managerial control of the foreign operation. |
| World Bank | An important international institution that provides loans at below-market interest rates to developing countries, typically to enable them to carry out development projects. |
| recession | A sharp slowdown in the rate of economic growth and economic activity. |
| depression | A severe downturn in the business cycle typically associated with a major decline in economic activity, production and investment; a severe contraction of credit; and sustained high unemployment. |
| default | To fail to make payments on a debt |
| Bank for International Settlements (BIS) | One of the oldest international financial organizations, created in 1930. Its members include the world's principal central banks, and under is auspices they attempt to cooperate in the financial realm. |
| International Monetary Fund (IMF) | A major international economic institution that was established in 1944 to manage international monetary relations and that has gradually reoriented itself to focus on the international financial system, especially debt and currency crisis. |
| multinational corporation (MNC) | An enterprise that operates in a number of countries, with production or service facilities outside its country of origin. |
| Bilateral investment Treaty | An agreement between two countries about the conditions for private investment across borders. Most BITs include provisions to protect and investment from government discrimination or expropriation without compensation, as well as establishing mechanisms to resolve disputes. |
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