What explains today's high degree of global financial integration Essay

What explains todays high degree of global financial desegregation - Essay Examplelobal consolidation in the financial market has given the opportunities to the investors to diversify the risks and to access the financial products in a more calorie-free way. (Agarwal, n.d.)The functionalities of the process of globalization has been motivated by heterogeneous factors, such as gradual increase of tidy sum in goods and services, increase of free movement of capital across international borders, increase of international mobility of parturiency and increase of global technological transfers. The impact of international movement of capital and global financial integration on the developing countries experienced a dramatic change in the early 1990s with the sweetener of financial deregulation in many a(prenominal) countries. (Wolf 2005) This is the period when the free capital movement from the developed and industrial nations to the developing nations had started to rise vividly wh ich was seen through the increase in growth of the developing nations. However, during this era the populace has also seen a sequence of financial crises across many countries. In one hand many developed countries faced the financial crises, such as the 1992 and 1993 financial crises of the developed countries in the European permutation Rate Mechanism (ERM). On the other hand the developing nations also faced such crises, want the Mexican Tequila crisis in 1995, 1997 and 1998 Asian crises, the Latin American and the Russian crises from 1998 to 2000 etc. All these crises that were seen throughout incompatible part of the globe gradually proved that there lies an inherent risk of the international financial integration behind its benefit. The international financial integration through the opening of the cross border financial markets is a multifarious phenomenon that involves in unrestricting the movement of foreign direct investment (FDI) from the developed countries to the dev eloping countries and pulling up the regulations from both the short term and long term financial instruments which are responsible