Overview of International Financial System: How It Affects Nigeria Financial System

Abstract

The study investigated how international financial systems affect Nigerian financial systems to show which international financial elements impact Nigerian financial stability. The study adopts a qualitative, theoretical approach based on a systematic review of recent literature, guided by the International Financial Integration Theory and the Mundell-Fleming Model. The findings show that capital flows and exchange rate movements and institutional partnerships and capital market connections serve as the primary channels which connect the two systems. Financial integration provides better capital access which helps financial growth but it makes businesses more vulnerable to external market disturbances while restricting their ability to manage monetary policy. The study concludes that the relationship requires both financial openness and regulatory control to achieve its full advantages while maintaining its potential dangers. The researchers propose that domestic institutions should be strengthened while adaptive policy frameworks should be implemented to establish better resilience.