Financial Globalization across economies.

The data used in generating the figures below are sourced from the World Bank’s Global Financial Development Database (2004 – 2014). The indicators reported are defined as follows:
Indicator Short definition Topic
Lerner index A measure of market power in the banking market. It compares output pricing and marginal costs (that is, markup). An increase in the Lerner index indicates a deterioration of the competitive conduct of financial intermediaries. Market Power

For this assignment/Quiz 5, you are first required to read the following sections of chapter 20 and apply the concepts towards answering the questions below.
Read the following sections:
Analyze problems in the regulation and supervision of international banks and non-bank financial institutions.
Describe some different methods that have been used to measure the degree of international financial integration.
Understand the factors leading to the worldwide financial crisis that started in 2007.
Evaluate the performance of the international capital market in linking the economies of the industrial countries.
Note: For a general overview of these economies, you also need to research further on their characteristics such as degree of globalization, infrastructure strength, regional differences, regulation, financial crisis experiences, market structure and others.
Answer the following question:

1. What does the Lerner Index shown above (Figure 1) tell about the degree of regulation across the outlined economies (150 words max.) – 20 points
2. Refer to Figure 1: With increased globalization, briefly analyze the problems associated with the supervision of bank and non-bank financial institutions in Canada and any TWO of the outlined countries (150 words max.) – 20 points
3. Refer to Figure 1: Briefly describe the some of the methods adopted in Canada and any TWO of the outlined countries in measuring the degree of international financial integration (150 words max.) – 20 points
4. Did any of these listed economies experienced any financial crisis in 2007/2008? Discuss the factors that led to such crisis (150 words max.) – 20 points
5. Refer to Figure 1: How does the international capital market impact Canada and any TWO of the listed economies? (150 words max.) – 20 points

Sample Solution