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This consolidation of global relationships is at the level of&nbsp.individuals,&nbsp.companies,&nbsp.institutions&nbsp.and countries (Campenhout and Cassimon, 2012).&nbsp.The main causes of the process of globalization are the&nbsp.technical progress in the communications and transportation sections, as well as, the&nbsp.political&nbsp.decisions on&nbsp.liberalization&nbsp.of&nbsp.world trade. The study of International Finance is of particular significance in today’s globalized financial marketplace. International finance is a branch of&nbsp.international economics and focuses on the monetary side of the international&nbsp.economy. The subject matter of international finance is useful for students of economics, finance and business studies.&nbsp.&nbsp.It is theorized that increasing globalization has played a role in creation of a wave of international financial crises in contemporary times (Schmukler and Vesperoni, 2006). The paper critically evaluates the supposition of globalization’s role in international financial crisis and assesses the question whether international financial stability is feasible in an increasingly globalised economy. In addition, the paper critically appraises international financial crisis and ensuing policy responses to maximize economic and welfare consequences.&nbsp. Discussion The degree of change brought about by the globalization of financial systems has been termed as financial globalization&nbsp.by several researchers. Globalization of financial systems leads to the creation of a regional market integration of external financing.&nbsp.According to Mishkin (2009), the financial aspect of&nbsp.globalization&nbsp.has three dimensions: geographical aspect of financial globalization refers to mobility of capital from one country to another, functional aspect of globalization relates to&nbsp.capital markets which are compartmentalized through shifts in money markets and&nbsp.stock markets. Obadan (2006) mentions that under the influence of financial globalization, global financial institutions are created, as well, like the&nbsp.IMF, World Bank&nbsp.and the European Community. Globalization’s effect on international financial markets also includes deregulation, abolition of&nbsp.exchange controls&nbsp.and restrictions on capital movements. Globalization also encourages financial innovation, disintermediation and direct access operators to funding without going through&nbsp.intermediaries (Cline, 2010). The impacts of globalization on the financial systems are dealt under heads: Market Development Financial globalization has facilitated the financing of companies and that the&nbsp.balance of payments. This has eliminated barriers to capital flows and has given an unprecedented boost to&nbsp.financial markets worldwide (Rose, Prasad and Terrones, 2009). Today financial information is processed and disseminated around the&nbsp.world, which leads to increased speculations in the financial markets and a high&nbsp.volatility&nbsp.of&nbsp.capital round the globe.&nbsp.This provides a flow of investment opportunities based on&nbsp.economic factors (Mishkin, 2009). These effects are sometimes seen as uncontrollable by the regional banking system&nbsp.and the&nbsp.

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