Although globalization has effectively eroded the nation-states’ sovereignty especially in economic terms, there are still elements that are under the state’ s control. This includes tax, explained previously, and the financial regulation. Financial regulation includes a country’ s monetary policy, among other regulatory initiatives that are anchored on a government’ s responsibility for soundness especially that an event of a financial crisis is a matter of public concern. For example, back in the 80s, a major systematic crisis was avoided purportedly on account of the US Federal government’ s regulators. For example, “ the Fed persuaded Chase Manhattan to absorb a substantial portion of Drysdale’ s losses on the grounds that it had acted as agent for the government securities dealer.
Had the Drysdale default occurred after the failure of Penn Square Bank and the Mexican crisis, Chase might not have been able to absorb these losses without seriously undermining public confidence in the bank” (D’ Arista 176). Two things revolutionized the way finance activities and transactions are conducted today: technology and the Internet. These two elements brought about the so-called electronic finance – that platform which is able to provide financial services as well as the coverage and creation of new financial markets by way of information technology, telecommunications, and the Internet.
An excellent example of this development in finance is e-banking. Here, banking services and products can be accessed in an online banking system, using advanced technologies and web other computing applications. Gkoutzinis (2006) stressed that “ from an economic perspective, information technology and computer networks have enhanced the automation, speed, and standardization in communications and internal administration, increasing customer convenience and functionality and reducing costs in back-office and front desk banking functions” (8).
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