VIEWS: 17 PAGES: 2 POSTED ON: 9/10/2011
World Trade Organisation (WTO) Is the most powerful instituion in the world governing international trade restrictions. The WTO aims to eliminate or reduce trade restrictions. It establishes rules and also organizes negotiation rounds. World Bank (International Bank of Reconstruction and Development) The World Bank has responded wisely to critism of its loans. It established a system of hearings, allowing economists and environmental protection groups to criticize projected loans. International Monetary Fund (IMF) The IMF aims to stabilize currency exchange rates, in particular to enable repayment of foreign debt. Trade restrictions Trade restrictions are artificial barriers to trade, including tariffs/duties, quotas, subsidies, “buy local”-restrictions and restrictions based on industrial standards. Trade restrictions lower general welfare – this was showed by Adam Smith in 1776. North American Free Trade Agreement (NAFTA) Balance of trade (Handelsbilanz) Value of exports – value of imports Balance of payments (Zahlungsbilanz) Value of incoming – value of outgoing payments Money Is a universal medium of exchange and is a standard of value. Commercial banks (Kommerzbanken) offer: - deposit services in current account, giro account, checking account (Girokonto) - use checks, cheques - sight demand deposits (Sichteinlagen) - savings account (Sparkonto) - administer credit (credit card – money is automatically transferred from your current account) - asset management / trust banks (Vermögensverwaltung) - provide loans/credit check/cheque is a order by the account holder to his bank, to pay a specified amount of money to a specified person after a specified date. Accounting (Rechnungswesen, Kostenrechnung) Establishes cost categories and evaluates rules and prepares financial reports. Bookkeeping (Buchhaltung, Buchführung) Is recording of incoming and outgoing payments (backed up by invoices). Auditing, Controlling (Buchprüfung, Kontrolle) GAAT: (US) is medium detailed, mainly requiring “accuracy and transparency” whereas GoB contains quite detailed evaluation rules; GoB: evaluations are conservative, and they are part of commercial code. Firms typically are forced to create hidden reserves (stille Reserven) – German/Austria. This is favorable for creditors, but not for shareholders.
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