| Comments welcome Financial Globalization: Opportunities and Challenges for Developing Countries * Comments to (2007) | |||||||||||||||
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| This chapter discusses the opportunities and challenges that financial globalization entail for developing countries. Financial globalization can come with crises and contagion. But financial globalization can also lead to large benefits, particularly to the development of the financial system. The net effect of financial globalization is likely positive, with risks being more prevalent right after countries liberalize. In the long run, large potential gains are expected. So far, only some countries, sectors, and firms have taken advantage of globalization. As financial systems turn global, governments lose policy instruments, so there is an increasing need for international financial policy coordination. * We thank the participants of the Globalization Policy Research Report and seminar participants at a workshop organized by the World Bank Managing Volatility Thematic Group for very helpful discussions. | |||||||||||||||
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