International finance

International finance studies and manages financial flows, markets, institutions, and decisions that cross national borders, including currency exchange and cross-border investment.

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Foreign exchange market: A global market where currencies are bought, sold, and exchanged. It sets the prices at which international payments and investments are converted between currencies.
International banking: Banking activity conducted across national borders, including foreign-currency lending and deposits. Banks finance trade, transfer payments, and connect borrowers with capital in other countries.
Fixed exchange rate: An exchange-rate regime in which a currency’s value is pegged to another currency or a defined standard. It constrains monetary and foreign-exchange policy differently from a floating rate.
Currency crisis: A sharp loss of confidence in a currency that produces rapid depreciation or forces a costly defense of its value. Sudden shifts in cross-border positions can trigger pressure on a currency.
Exchange rate: The price of one currency expressed in another currency. Currency prices affect trade costs, investment returns, and the value of foreign-currency debts.
International bond: A bond issued across national borders, often in a market or currency different from the issuer’s home market. Governments and companies use these securities to raise funds from foreign investors.
Floating exchange rate: An exchange-rate regime in which a currency’s value is mainly determined by market supply and demand. It contrasts with pegs by allowing currency prices to adjust more freely.
Sudden stop: An abrupt reversal or collapse of foreign capital inflows to an economy. It can leave countries unable to refinance external debts or fund current spending.
Balance of payments: An accounting record of transactions between a country’s residents and the rest of the world. Its accounts track trade, income, transfers, and financial flows across borders.
Foreign direct investment: A cross-border investment that gives an investor lasting influence over a foreign enterprise. It moves capital together with ownership and managerial involvement across borders.