Forex and the National Systems
Online forex is part of international trade. If the entire world happens to embrace free trade, then there will be problems now. The reality however is much different as the Recession looms and many nations are reverting to their protectionist anti-free trade policies that characterize some nationalist governments. This limitation in forex trading is brought about by the different tax codes, accounting rules, banking regulations, and laws. The different settlement and payment systems make trading much difficult in some countries while much easier in others. Recall that in economic regions like Southeast Asia and the European Union, there are no standardized tax codes and banking rules followed by individual nations.
The five major markets (European Union, United States, Japan, Hong Kong and Switzerland) have free trade policies, and monetary policies are less nationalistic in tone. These nations allow more free trade to flourish, and more of their citizens are engaged in the lucrative online forex trading market. In places where free trade is still doubted like most Southeast Asian and Latin American countries, online forex trade is at its minimum. The numerous restrictions make it difficult for ordinary Joes to play in the market.
Even if in the international arena, currencies are sold, bought and traded simultaneously. Many private investors and commercial banks have to deal with individual national infrastructure. They cannot simply be ignored because these laws and policies have penalty clauses in them. Violations of these rules in trading and standardized accounting rules in foreign exchange may result to fines, blacklisting, and other penalties. As we move on to the next decade, we just wish that our governments guarantee more free trade so we can do forex trading like the major developed nations.
