Summary: Financial globalization has deepened in recent years, with emerging economies participating actively, but not always smoothly, in this process. Emerging countries have issued significant amounts of debt and equity in the international financial markets. There has also been a marked increase in trade and FDI in international financial services activities and a consolidation of financial institutions, with foreign banks playing a predominant role. This process has been aided by international policies (such as the General Agreement on Trade in Services) and by governments’ efforts to liberalize and deregulate the financial sectors, open the capital accounts, and emulate the performance of the financial systems in developed countries.

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