ABSTRACT

This chapter examines the processes of financial integration and deregulation in Latin America and East Asia, by specifically addressing the experiences of Mexico, South Korea and Taiwan. The new phase in the internationalization of financial capital is the result of a process of innovation and deregulation of financial markets. Technological changes, rapidly assimilated by the financial sector, have made key contribution to the globalization of capital markets. Innovation and financial deregulation are taking place in all market economies, the result of a combination of several factors. The Latin American debt crises reflected the intimate relationship between a country's sovereignty, and its financial strength. In Japan, France, Germany, and Italy and in most developing countries, changes in legislation have created the conditions for the emergence of new financial products and markets. Financial liberalization should be gradual and must be accompanied by macroeconomic stability. Financial liberalization must be accompanied by a return to long-term planning horizons.