Unit3 - Financial Integration

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IBM

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

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