ABSTRACT
Since East Asian economies have undertaken measures of financial deregulation from the early 1990s, their financial markets have tended to become more integrated internationally. International financial market integration can bring various benefits: economies can smooth consumption in the face of temporary falls in income and finance domestic investment in excess of domestic saving. They can also hedge country-specific risks via international financialmarkets. However, integrated international financialmarkets can also have a negative effect: economic shocks can easily be transmitted among countries, as shown by the 2008 global financial crisis. Contagion effects have also been important sources of financial and/or currency crises.
