| A close relationship between information and transnational banking industries has existed for over a century. However, the recent development in information technology, where computer and telecommunications converged and which is known as transborder data flows, TDF, has changed the nature of this relationship and the structure of international political economy. TDF makes time, space, and distance meaningless in the process of storing and transferring data. More than any industry, the banking industry is very sensitive to these three elements.; Utilizing TDF, transnational banks and other financial establishments have created a variety of communication networks. These networks are used for different purposes which range from personal management to money and fund transfers. Thus, the financial market is internationalized, making the concept of national borders of little relevance.; The impact of TDF goes beyond the internationalization of banking. As soon as this new technology came into use around the mid-1960s, Western banks began a period of across-the-border expansion. Therefore, by the beginning of the 1970s, the old financial system, which was based on state supervision, started to break down. Currencies were floated, and financial markets were gradually deregulated. At the same time, many financial phenomena such as Euromarket and off-shore financial centers are becoming an integral part of world finance. These phenomena are made possible by TDF, and they further globalized the financial market.; By the 1980s, Western governments were losing their power over financial transactions, socialist countries were moving toward more integration with the world capitalist economy, and transnational financial establishments became the master of international financial relations. This structural change has produced many results: Barter becomes an important part of international trade, labor organizations, and third world countries' statures are weakened.; Perhaps the most important part in transnational banking is the diminishing role of the state. Since the emergence of the national state system, the state role in political economy was increasing over the years. This role, however, is going through a period of reverse in the last fifteen years.; The study concludes that the current transformation in the world system is not over yet. It might lead to the emergence of conflicting economic blocs, or perhaps a total collapse of the world financial system. |
