The available evidence suggests that developing countries have not fully attained this potential benefit”.……… “A type of threshold effect appears here as well - reductions in volatility are observed only after countries have attained a particular level of financial integration”……….. “The evidence presented in this paper suggests that financial integration should be approached cautiously, with good institutions and macroeconomic frameworks viewed as important.
The review of the available evidence does not, however, provide a clear road map for the optimal pace and sequencing of integration. Such questions can best be addressed only in the context of country-specific circumstances and institutional feature”. The guidance for policy makers from the above is perhaps clear.