There are many topics that one might cover in a paper presented at a seminar on banking soundness and monetary policy in a world of global capital markets. One could speak about banking; or about soundness; or monetary policy. And then there is the central issue, namely global capital markets, with the emphasis on markets because that is where the constraints and the opportunities come into play. In principle, one can address these broad topics from either a domestic perspective, or an international perspective. However, “globalization” implies that the distinction between the domestic and international arenas becomes blurred. As a matter of fact, in a global environment it is hard to think of anything remaining purely domestic.