ABSTRACT
In the 1970s, international banks were the most important players in the international capital. Central bank intervention is normally due to political motives; however, private sector portfolio investors have specific economic objectives, and in bonds, they seek strength in currency and high yields, whereas in equities, the objective is for diversification and growth. In response, international banks have increased the scale of the resources devoted to the international primary market, which became one of the most profitable investment banking activities. The prospect for an increase in international capital flows toward the developing world is bright. Barriers occur particularly in banking and financial services, especially in Asian countries, which have been reluctant to deregulate financial markets. The shares of direct investments are higher, the shares of the banking sector and portfolio investments are also prominent, whereas the shares of official borrowing are declining.
