What is more, research for the United States reveals that private risk sharing via integrated capital markets is far more conducive to cushioning shocks that public risk sharing, which is the main talking point in Europe.
In regard to capital outflows, the policy framework has been progressively liberalised to enable the nonfinancial corporate sector to invest abroad and to acquire companies in the overseas market. Resident individuals are also permitted outflows subject to reasonable limits. The financial sector, especially banks, is subject to prudential regulations, both in regard to capital and liquidity (Mohan, 2007b).