•  Third, financial integration, by involving the removal of restrictions on capital flows, could serve as a catalyst for capital market development providing long-term and risk capital, both of which are major constraints to economic development in small countries. •  Fourth, greater financial macroeconomic policies.
integration  could  impose  stricter  market  discipline  on  Of course, if you get to the ultimate form of financial integration, which is the monetary union, the potential advantages are even greater. By reducing transaction costs and eliminating exchange rate uncertainties, monetary union is supposed to promote greater intra-regional trade.