Challenges of Global Financial Management

In current situations, there are various challenges that global financial management is facing. These challenges include real estate, consumer credit, banking, new market, corporate credit and general credit, etc. These challenges

affect the global financial management and create problems in managing finance globally. In this, real estate is one of the important challenges for the global financial management. The continued deterioration of the real estate market in the global world creates a major problem that needs to deal with. In the challenges, credit is also a major challenge that presents the problems for the global financial management. In this, it is identified that unemployment in the market increases the consumer debt internationally (Caouette, Altman, Narayanan & Nimmo, 2011). In today’s situations, banks are also presented the challenges for global financial management. It is because most of the international banks are facing trouble due to their operations and the conditions of global market. In order to provide benefits, banks are more focused on the other services rather than the business. In most of the countries the financial macro level infrastructure is not developed as well. This creates the challenges for the global financial management and increases the inflation rate in the world (Boerse, 2008).

Foreign Exchange Risk Management As per Foreign exchange risk management assignment help experts refers to the management of unexpected changes in exchange rate internationally. The foreign exchange risk management is an integral part of all the major corporate decisions to manage foreign exchange exposure in the global business scenario in which business firms operate. For an organization, the foreign exchange risk may arise from future commercial transactions, recognized assets and liabilities and net investment in foreign operations. In order to manage these risks, organization can use forwards contracts and FX options (Bragg, 2011).

Importance of Companies to Go Internationally In today’s market conditions, it is important for the organizations to go internationally and start their business operations in the international market. Going internationally may be helpful for the organizations to increase customer data base and revenue of the firm to achieve competitive advantages and may also be cooperative in creating healthy competition for the competitors. Companies can also generate profits by their operations and can also be helpful for the countries’ governments to reduce the inflation rates through their operational activities. The foreign exchange risk management enables the MNCs to address and minimize impact of foreign exposure or fluctuations in foreign exchange rates on their payments and receivables effectively (Caouette, Altman, Narayanan & Nimmo, 2011). The foreign exchange risk management is also important for the companies in creating effective currency conversion. For example, with the help of foreign exchange risk management, company in the United States can import goods from the other countries especially from the European Union member country and pay Euros, even its income is in UK dollars. It is also important for the firms in manner of reducing the volatility of cash flow and also protects the earning fluctuations and hedge the risk irrespective of the views on foreign exchange risk (Epstein & Jermakowicz, 2010).   References Boerse, J. H. (2008). Foreign Exchange and Disaster Risk Management in Microfinance Institutions. Germany: GRIN Verlag. Bragg, S. M. (2011). Risk Management: Foreign Exchange. USA: John Wiley & Sons. Caouette, J. B., Altman, E. I., Narayanan, P. & Nimmo, R. (2011). Managing Credit Risk: The Great Challenge for Global Financial Markets. USA: John Wiley & Sons. Epstein, B. J. & Jermakowicz, E. K. (2010). WILEY Interpretation and Application of International Financial Reporting Standards 2010. USA: John Wiley & Sons.

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