**2. Introduction to international financial markets and financial capital flows**

### **2.1 The emergence of international financial markets and financial capital flows**

The most important financial markets and financial capital flows known to economic history in Europe, and indeed in the world - and in which they were dealt with bills of exchange, promissory notes, and precious metals are the markets of Venice and Genoa in Italy and the Frankfurt market, and these markets were among the most important European financial markets dealing with the Middle East, which witnessed in that period a huge commercial activity as a center of communication between the far East and Europe.

With the development of capitalist economic thought that calls for specialization and division of labor, and with the emergence of the industrial revolution, the importance of individual investments that require large financial resources that exceed the capabilities and capabilities of individuals has increased [13].

As a result, joint-stock companies appeared which opened a wide field for the participation of a larger number of shareholders in the ownership of companies, thus ensuring the necessary financing for them. On the other hand, the number of banks has developed and their importance has increased in various countries [4].

All these factors and conditions, as well as the expansion of investment projects and commercial transactions, contributed greatly to the emergence of financial markets as an effective tool for mobilizing the resources and savings needed for commercial and investment financing [14].

The first financial markets to appear were in the seventeenth century (17th century) in Amsterdam, then in the eighteenth century (18th century) in Venice, and the nineteenth and twentieth centuries (19th and 20th century), respectively, witnessed the emergence of the British and international financial centers American [15].

Stock exchanges appeared in the nineteenth century (19th century) for trading goods, products, and securities and concluding deals. The emergence of stock exchanges was the result of many economic factors, the most important of which are [16, 17]:


• The financial markets in developed countries have developed in conjunction with the changes and developments taking place at the technological level, and the volume of production and large business units has grown faster than the available means of financing.

The activity of the financial markets has increased dramatically. The number of financial markets in the United States of America has reached fourteen at present, the most important and largest of which is the New York Stock Exchange. In Britain, too, all financial markets have merged since (1913) into one system, which is the London Stock Exchange [18].

In Japan, eight stock exchanges are currently operating, led by the Tokyo Stock Exchange. This is the case in Germany, where there are also eight stock exchanges, the most important of which is the Frankfurt Stock Exchange. As for France, there are seven stock exchanges headed by the Paris Stock Exchange [1].
