**3.2 Analysis of the reality of Investment in International Financial Markets and Financial Capital Flows**

The global economy, in view of the increasing importance of capital in the financial services industry with its banking and non-banking components, has become a tool driven by indices and symbols of global stock exchanges (Dow Jones, Nasdaq, Nikkei, DAX, Kick) which leads to the transfer of in-kind wealth from one investor's hand to another. Without hindrances or even across geographical borders, where the continuous movement of capital looking for a profit in front of its accumulated surpluses, providing guarantees to the owners of these funds and diversifying them through the mechanisms provided by financial instruments and controlling the different markets [24].

For example, World Bank reports indicate that the volume of transactions at the global level reached about (300) billion dollars for the (Euro-Dollar) market in one working day, which is approximately (75) trillion dollars per year, while the volume of trade in the sector did not exceed Goods and services (3) trillion dollars until it became a threat to the economies of the world [6].

The experiences of the nineties of the last century proved that this movement of huge amounts of capital often led to the occurrence of costly financial crises and shocks (in Mexico, the Asian tigers, Brazil, Russia) represented in [23]:


*Perspective Chapter: International Financial Markets and Financial Capital Flows... DOI: http://dx.doi.org/10.5772/intechopen.102572*

Weakening control over national policies in the areas of monetary and fiscal policy.

Thus, the great powers of investment accounted for the wealth and markets of the world, helped by the flourishing of communication networks and the transfer of information provided by the tremendous technical progress in linking global financial markets, allowing investors to respond to developments in the markets in a timely and immediate manner [25].

Because of the phenomenon of monetary inflation, which is one of the structural characteristics of modern economic life in various countries of the world, which in turn led to the rise in the costs necessary for investment, in addition to the need for capital to expand its activities and the inability of savings on the other hand to meet the volume of required investments, there is no other way but the financial markets to obtain the necessary funds to meet that demand for the implementation of investments, through which transactions are conducted through the investors selling their shares or increasing them by buying [26].

Thus the financial market became active as a new financial tool, and the accompanying calls for the abolition of legal and legislative regulations that stand in the way of promoting market economies and the practice of banking and financial operations on a large scale, and then accelerating the movement of capital flows across borders, which created an expansion in the scope of dealing in different types of securities, turning parts of the volume of traded capital into speculation globally in the currency markets, stock exchanges, securities, stocks, bonds and short sales, which made dealing in the international financial markets requires a continuous review of the concepts, effects, and even strategies followed [27].

Often, dealing in these markets is within a deliberate process driven by capitalist forces to achieve their interests, including trade liberalization and opening international markets to the free movement of goods and services through the main players. These international markets that lead investment operations, sales procedures, brokerage, and financial speculation [28].

## **3.3 Large transnational corporations and international financial markets, financial capital flows**

In the wake of the economic boom following the end of the Second World War, the phenomenon of the spread of the so-called multinational corporations or transnational corporations (most of these corporations are American, European, or Japanese) has emerged [1].

Big companies seek to support and promote the global free market, where the largest and strongest player in the image of giant multinational corporations and major players in international financial markets. From here, the art of the game becomes clear in the international financial markets through these companies and as follows:

1.The escalation of trends and movements of Western capital and companies of this type with the help of the communications and information network, illustrates the huge sources of power that allow giant monopolies to penetrate global markets, including stock markets through movements, activities and interactions to increase their ability to maneuver in dealing in these markets by following the method of encouraging speculation in the stock exchanges on stocks and bonds in order to operate the huge moving financial masses of money with banking assets, whose value exceeds the total value of world trade by at least thirty times (of visible and invisible goods and services), and this means that if the total value of merchandise trade at the level of the world is three trillion dollars (as we have shown), the volume of investments offered in the field of stock exchanges, bonds, and electronic money or credit cards that they deal

in in those markets is not less than (100) trillion dollars, which in turn are far from the control of the richest central banks in the world [6, 29].


Money laundering takes place in three stages:

**The First Stage**: Employing illegal funds in the form of deposits with banks and financial institutions, or buying shares and bonds.

**The Second Stage**: Concealing the true source of funds by conducting a series of financial transactions.

**The Third Stage:** Repositioning the illegal money after it has been laundered.

The international financial markets are considered one of the most important areas that enable this type of funds to operate, as it is difficult to follow up, control, or even besiege them in this market due to its integration into the network of traditional financial and banking activities.

Payment via the Internet, and money launderers do not care about the economic feasibility of investment as much as they are interested in employment that allows the return or continuity of money circulation, which poses a risk to the investment climate, especially in the financial markets represented in the stock markets of stocks and bonds, as the movement of money required to be laundered without taking into account profitability within the space of these markets will lead to confusion in the market and promote the process of speculation among dealers in the market and create a state of unequal competition with investors, as the moneylaundering process, due to its large amounts, affects interest rates and exchange rates, and this reflects the rapid variation in the prices of stocks and bonds, and its changes, thus falling into the trap of losses, withdrawal from the market, or the bankruptcy of some investors; In view of the large size that laundered money

*Perspective Chapter: International Financial Markets and Financial Capital Flows... DOI: http://dx.doi.org/10.5772/intechopen.102572*

occupies in the international financial markets, especially since there are gangs, networks and international organizations with huge potentials specialized in the processes of creating dirty money, and laundering it - its laundering - thanks to financial globalization through the movement of people, bank transfers and the transfer of capital [21].

The United Nations profits generated from organized crime amount to one trillion US dollars annually and a fifth of this huge amount is re-laundered in the global economy or about (200) billion dollars annually [6].

Among the most prominent of these dealings is what is happening in the field of financial markets and financial institutions that practice secret financial and banking accounts, where money is laundered and laundered through the means of entering into stock and bond purchases (a series of buying and selling operations) and the negative effects of such operations on trading operations, and dealing in those markets and the matter becomes more dangerous if we know that dirty money laundering networks employ a large number of economic and financial legal advisors and brokers to manage and follow up the transactions, especially through financial institutions and (Off Sure) banks that issue forged invoices and end-use certificates to hide the source of these funds, and what follows from the Confusion in the international financial markets as a result of sudden and rapid changes in the prices of stocks and bonds and the value of exchanges in general [32, 33].

This is the state of the international financial markets, financial capital flows and the cases of unequal competition, speculation, and manipulation in investment operations in them, which makes them under the weight of the alarming movements of financial blocs and capital flows and the growing ability of the most powerful actors on the global capital level, to form the empire of monetary capital independent of industrial and commodity capital and thus is done Monopolizing the resources and returns of the international financial markets through investment and speculation operations in those markets [34].
