Abstract

The trends in financial flows and asset prices discussed in the preceding section occurred in the context of a continuing process of financial market internationalization and integration. This process intensified during the 1980s and has contributed to more efficient market mechanisms for the mobilization and allocation of savings, both nationally and internationally. Nevertheless, the resulting intensification of competition and pressure on profitability may, at the same time, undermine the viability of certain established institutions and market structures. Similarly, the increasing ease with which the location of financial activities may be shifted from one segment or jurisdiction to another may have adverse systemic risk implications. While there have been some instances of localized strains on financial institutions and markets, regulatory and supervisory systems have generally succeeded in containing disruptions.

International Capital Markets 1991
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