Open market in the context of "Free trade"

In international relations, the liberal international order (LIO), also known as the rules-based order (RBO), consists of a set of global, rule-based, structured relationships based on political liberalism, economic liberalism and liberal internationalism since the late 1940s. More specifically, it entails international cooperation through multilateral institutions (like the United Nations, World Trade Organization and International Monetary Fund) and is constituted by human equality (freedom, rule of law and human rights), open markets, security cooperation, promotion of liberal democracy, and monetary cooperation. The order was established in the aftermath of World War II, led in large part by the United States.

The nature of the LIO, as well as its very existence, has been debated by scholars. The LIO has been credited with expanding free trade, increasing capital mobility, spreading democracy, promoting human rights, and collectively defending the Western world from the Soviet Union. The LIO facilitated unprecedented cooperation among the states of North America, Western Europe and Japan. Over time, the LIO facilitated the spread of economic liberalism to the rest of the world, as well as helped consolidate democracy in formerly fascist or communist countries.

Economic liberalization, or economic liberalisation, is the lessening of government regulations and restrictions in an economy in exchange for greater participation by private entities. In politics, the doctrine is associated with classical liberalism and neoliberalism. Liberalization in short is "the removal of controls" to encourage economic development.

Many countries have pursued and followed the path of economic liberalization in the 1980s, 1990s and in the 21st century, with the stated goal of maintaining or increasing their competitiveness as business environments. Liberalization policies may or often include the partial or complete privatization of government institutions and state-owned assets, greater labour market flexibility, lower tax rates for businesses, less restrictions on both domestic and foreign capital, open markets, etc. In support of liberalization, former British prime minister Tony Blair wrote: "Success will go to those companies and countries which are swift to adapt, slow to complain, open and willing to change. The task of modern governments is to ensure that our countries can rise to this challenge."

In macroeconomics, an open market operation (OMO) is an activity by a central bank to exchange liquidity in its currency with a bank or a group of banks. The central bank can either transact government bonds and other financial assets in the open market or enter into a repurchase agreement or secured lending transaction with a commercial bank. The latter option, often preferred by central banks, involves them making fixed period deposits at commercial banks with the security of eligible assets as collateral.

Central banks regularly use OMOs as one of their tools for implementing monetary policy. A frequent aim of open market operations is — aside from supplying commercial banks with liquidity and sometimes taking surplus liquidity from commercial banks — to influence the short-term interest rate. Open market operations have become less prominent in this respect since the 2008 financial crisis, however, as many central banks have changed their monetary policy implementation to a so-called floor system (or system of ample reserves), in which there is abundant liquidity in the payments system. In that situation central banks no longer need to fine tune the supply of reserves to meet demand, implying that they may conduct OMOs less frequently. For countries operating under an exchange rate anchor, direct intervention in the foreign exchange market, which is a specific type of open market operations, may be an important tool to maintain the desired exchange rate.

The 2010 G20 Toronto summit was the fourth meeting of the G20 heads of state/government, to discuss the global financial system and the world economy, which took place at the Metro Toronto Convention Centre in Toronto, Ontario, Canada. The summit's priorities included evaluating the progress of financial reform, developing sustainable stimulus measures, debating global bank tax, and promoting open markets. Alongside the twenty-one representatives of the G20 major economies, leaders of six invited nations, and eight additional intergovernmental organizations also took part in the summit.

Prior to the summit, Canadian Prime Minister Stephen Harper announced that the theme would be "recovery and new beginnings," referring to an anticipated economic stimulus from the impact of the ongoing world recession. Harper initially proposed to hold the summit in Huntsville, Ontario, where the 36th G8 summit was scheduled immediately prior. Organizers later deemed the town insufficient to provide hospitality for the large number of G20 delegates and journalists, favouring Toronto as the host location.