This crisis harshly impacted the world of currency trading, yet the source of the problem had nothing to do with this investing medium. The forex community is in a tailspin, trying to repair its tarnished image. Clients are shifting allegiances right and left, and chaos prevails. The sad truth, however, is that this type of risk could have impacted any type of brokerage house on the planet. It is not unique to foreign exchange.
In this modern era of globalization, capital easily can flow to all corners of the globe. Investing across national borders is more prevalent today than ever before. It was not that long ago that a 5% or 10% benchmark was suggested for overseas investment forays, but these figures have trebled in recent years.
Emerging and developing economies are growing at twice to three times the rate experienced in the advanced economies of the world. Profit may not always follow growth, but investors have stampeded overseas to test that hypothesis.
The primary issue, however, is whether your broker has installed the financial disciplines and best practices to protect you from account seizure by foreign officials. The time has come to ask a few penetrating questions of your broker.