What Is the Meaning of International Finance?

by Marquis Codjia; Updated September 26, 2017
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International finance activities help organizations engage in cross-border transactions with foreign business partners, such as customers, suppliers and lenders. Government agencies and nonprofit institutions also use international finance tools to meet operating needs.

Definition

International finance covers all procedures, techniques and tools that financial institutions, such as banks and insurance companies, provide to clients. These tools may include financing agreements and transaction strategies on securities exchanges, such as the Tokyo Stock Exchange.

Significance

International finance plays a significant role in modern economies. Many companies engage in multinational activities through export and import.

Function

An international finance specialist helps a firm access global markets and use financing tools to operate in the short term and the long term. He also evaluates the company's cash levels and recommends adequate funding options.

Types of Products

Types of products available in international finance vary by location, transaction requirements and legal compliance needs. The most popular products are global corporate bonds and loans, equity shares on international markets and private transactions with foreign business partners.

Types of Institutions

Various institutions are involved in international finance transactions. They include traditional financial institutions, governments and central banks. Other organizations include microfinance and development institutions, such as the World Bank and the International Monetary Fund.

About the Author

Marquis Codjia is a New York-based freelance writer, investor and banker. He has authored articles since 2000, covering topics such as politics, technology and business. A certified public accountant and certified financial manager, Codjia received a Master of Business Administration from Rutgers University, majoring in investment analysis and financial management.

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