The main change in the financial markets recently has been that of increasing integration and globalisation. This increasing integration has been due to the liberalisation of markets, rapid technological progress and major advances in telecommunications, which has created new investment and financing opportunities for businesses and people around the world. Today individuals and corporations can benefit from a more efficient allocation of resources by the easy and instant access to the global financial markets. This development will aid in the promotion of more efficient allocation of capital and will promote economic growth. Apart from this ongoing integration and globalisation, world financial markets have also recently experienced increased securitisation. In part, this development has been spurred by the surge in mergers and acquisitions and leveraged buy-outs that has taken place in markets of late, not least in the euro area. .
effective regulation of banks.
The recent events in the financial market have emphasized on the importance the need for effective regulation of banks and other financial institutions. Rarely since the global depression of the 1920s-30s and the oil shock of the 1970s has financial sector fallout been so evident. Since the liberalization of international financial markets in the 1970s-80s and the subsequent stunning negative impact of the BCCI scandal, there has been gradual recognition across countries of the need to harmonize legislation and regulations, and to introduce mechanisms for ongoing communication and closer coordination. .
Against the regulation of international financial markets.
Following the Asian Financial crisis, the international financial institutions put the blame on capitalist policies rather than the liberalisation of capital movements. The financial crisis revealed some serious errors in the corporate governance. Nevertheless, the countries, which were hit by the crisis, were all regarded as economic "miracles" prior to the crisis.
