Unit3 - Financial Integration
Unit3 - Financial Integration
Unit3 - Financial Integration
Unit 3
Anjali Singh
Integration of countries in terms of financial
markets & financial operations
Free flow of capital & investment is essential
Ability to raise money anywhere and invest funds
anywhere in the market on basis of expected
return & risk.
Key players – National government, International
business firms & international financial
institutions
Financial Integration & Economic Growth
Financial Integration & Productivity
Financial System’s spillover
FDI’s Spillover
Consumption Benefits
Higher rate of return
Diversification of risk
Changes in Developed Nations
Changes in developing Nations
International Rate of Interest
Investor Herding
Cross country Contagion
Banks are diversifying their portfolios, making
use of technology & increasing scale of
production
Risks
Structural changes
Poor regulatory systems
Increased volatility