World Markets, Research Paper Example

The situation in the Ukraine has become a primary story with regards to the performance of the global finaancial markets. The menace of the reinitiating of a cold war between Russia and the United States with regards to the Russian appropriation of Crimea caused the global financial markets to take a roll during the beginning of the week. As the week continued, the scenario which had been feared dissipated. This occurred as the insecurity over the correct reaction to the Russian assertion with regards to the Ukrainian situation (Warner 1). The political uncertainty caused ebbs in the global financial markets.  The FTSE 100 experienced a slight decline, The FTSE world increased by 1%. The Russian financial markets decreased by 9% (Lumsden, 1). The Russian exchequer bank increased the interest indexes on t money which is loaned from 5.5 % to 7.0%. The 1.5% increase in the interest’s indexes was a response to a devaluing Ruble during the escalation of events in the Ukraine Lumsden 1).

The situation in the Ukraine has the potential of evolving into a black swan for the global financial markets. There is a potential for an amplification of the situation toward the oil producing nations of Saudi Arabia and Iran. The Ukrainian incident has the potential of revitalizing antique eastern and western ambitions and rivalries. The financial markets of the FTSE 100, Euronext, CAC 40 and DAX 30 have been comparatively calm about the Ukrainian situation (Lumsden 1).

Ukraine has an economic system which is comparatively small. The Ukrainian economy has a more substantial connection with Russia than it does with the European continent.  If Ukraine were to cease to exist, Russia would demonstrate the implications, the influence on the financial markets of the European, and American nations would react marginally to the situation (Warner1).

Notwithstanding, it is the aspect of the black swan nations which have previously demonstrated an uncertainty in the future of the financial markets. It is unknown with regards to the response that will be provided by Vladimir Putin on the Ukrainian situation. In consideration of the atmosphere which surrounds the winter Olympics, there is an unlikelihood that the reaction will be mild. . The Ukraine serves as a reflection of the semi authoritarian type of mafia capitalism which is inherent in Russia. In the event that the resolution of Russian power cannot be resolved in the Ukraine situation, it is possible that the situation of insurgency will become a major problem for Russia (Warner 1).

The aspiration of coercing Russia into an aspect of an intimate economic rescue which is presented by the United States and Europe is not an option. Ukraine must be able to make its own choices and if the choices are erroneous it could have serious implications for the Ukraine. Notwithstanding, the effect on the financial markets has been relatively little.  The authoritarian effect of the new schedule of the events in the Ukraine from the perspective of the financial markets, the effects of the Ukrainian situation have not had the anticipated influence (Warner 1).

The impact that the European event of the assassination of the Archduke in World War One does not have the same implications for the financial markets as it would have had one hundred years ago.  The technological advances have caused the financial markets to become more stabilized. With regards to the financial markets, there is a greater likelihood that they will be influenced by the outcomes of the credit on the Federal Reserve Bank of the United States being restricted or the Chinese economic situation (Warner 1).

Conclusion

The Ukrainian n situation has not had the anticipated outcome on the financial markets that it was expected to have. The effect on the European and American economics has not manifested any substantial effects, yet.

Works Cited

Lumsden, Gavin. Friday 5 : Cold war, hot energy, pollution and probes. Lolly, 7 March 2014. Web. 17 March 2014<http://citiwire.co.uk/money/Friday-5-cold-war-hot-  energy-pollution>

Warner, Jeremy. “ Is Ukraine’s misery the next  Black swan for West’s financial m        markets?” The Telegraph 24 February 2014. Web 17 March 2014htpp://www.telegraph.co.uk/finance/comment/Jeremy-warner/106590