This integration paper is an overview of the topics discussed in the entire week. In this week two topics related to the financial systems and financial investment are discussed. The importance of the topics in a real-life situation is also discussed for finding its advantages to the individuals in making accurate investment decisions. The first topic is related to the financial systems in two countries, Japan and China. The second topic discussed relates to providing investment decisions to a client. The personal views relating to the topics are also pointed out in this integration paper.
In week one, two related topics on the financial systems are put under discussion. The first topic is related to the financial reporting system in two different countries. In this topic, a comparison between the financial reporting systems adopted by two Asian countries is discussed. The countries selected for the study are Japan and China. The subtopics discussed in the assignment are Japanese financial systems, Chinese financial systems and foreign direct investments. The aim of the study is to make a comparison of how the nature of the financial system affects behavioural/performance of firms in each of the two selected countries. The impact of the nature of financial systems adopted by the countries upon their behaviour and performance is identified through the comparative study method. “In these recession times, it is very important to plan to spend. The people who saved some money while they are in the good times will survive till, they get a good job. Think about those who have not planned their savings and are now jobless. So, it is always good to spend your money with plans.” (Krishnas, 2009).
From the discussion it is revealed that in Japan, the nature of financial system is based on corporate governance as well as credit market and money market activities. Influence exerted by corporate governance and government over the financial system makes it robust and overpowering. “Japan’s financial system, on the whole, has remained stable despite continued turmoil of global financial system stemming from the U.S. subprime mortgage problem. However, improvement in banks’ core profitability has stalled, and the gaps in their profitability and capital strength have widened.” (Financial system report (September 2008) 2009). In Japan, banking corporations have a great role in providing financial stability to the country. In the present business conditions, the capital market is greatly accepted by corporations for acquiring their financial resources. It leads to the lowering of the dependence on commercial markets. The discussion is focused on the importance of reconsidering the role of the government intermediation service provider in the present context of Japan’s financial system. From the discussion, it is identified that corporate governance, fiscal discipline, and public accountability are influencing the behaviour patterns and performance of Japanese companies greatly. “Stock and bond issues were the dominant sources of external funds. Banks played a limited role in corporate governance. Savers held their wealth in a variety of instruments, including stocks and bonds. Institutions were allowed to evolve without heavy regulation.” (Hoshi 2004, p. 4).
The discussion on the Chinese financial system reveals that the Chinese financial system has long been dominated by a monolithic but inefficient banking system. In China, the high non-performing assets in banks affect public confidence badly. Stock exchanges as a part of the financial system and the related speculative behaviour badly influence the financial system of China. Capitalist movements are supporting the country to get economic competency. Foreign direct investments are major tools used by China to reach the international market. (Allen Qian & Qian, 2005).
In China “The current financial system is dominated by a large but inefficient banking sector, and reducing the amount of non-performing loans among the major banks to normal levels is the most important objective for reforming the financial system in the short run.” (Allen Qian & Qian, 2005).
The second topic discussed in the week is related to a research project. The research project conducted as a part of the module of the week deals with the suggestions of investment proposal and describes different opportunities available for a person namely Beatrix. The research study helped me greatly to get an awareness of the factors influencing investment decisions. Through this research paper, investment advice is given to Beatrix as a consultant. For this purpose, the personal background of Beatrix is discussed in detail. For providing guidance on better financial investment decisions, various investment options such as investment in stock, fixed deposit in the bank, and the start of own business are analysed in relation to the background information of the client.
I am of the view that portfolio investment is the best option in the current situation. “A portfolio is the collection of all your investments: all the shares, bonds, cash deposits, property, and so forth. Careful investing involves building a diverse portfolio, one in which your investments are spread over a range of investment choices.” (Investment strategies n.d., p. 1).
The week‘s activities helped me greatly to empower the knowledge relating to the financial systems in different countries and their impact on the behavioural performance of the firms in the countries. The two topics discussed in the week are not new to me as I am familiar with the financial system in these two counties. In the week I attended six days in the class. My participation in the class helped me greatly to understand the different aspects of financial investment. It helped me to enhance the learning process in the field of finance. The research paper on the topic is not much successful as the data collection seems to be difficult. The topics discussed in the week are familiar to me as I am already informed of the different aspects of financial systems and their impacts on the behavioural performance of business organisations.
- Allen, F, Qian, J & Qian, M 2005, China’s Financial System: Past, present and future.
- Allen, F, Qian, J & Qian, M 2005, China’s Financial System: Past, present and future: abstract, Financial Institution Center.
- Financial system report (2008): an assessment of the current state of Japan’s financial system: an overview 2009, Bank of Japan.
- Hoshi, T 2004, Future of the Japanese financial system: Meiji restoration to 1937, Future of the Financial system.
- Krishnas 2009, Fixed deposit for monthly income: introduction, Plan Your Investment.
- Investment strategies n.d., 2009.