Secondly, however, in the long run the positive externalities of integrated financial markets outweigh the costs of switching from one institutional arrangement to another, so collective or public action may be necessary to achieve more efficient outcomes. Moreover, frequently collective action is crisis-driven – which reflects a somewhat pathological learning on the part of market participants.
Examples of this are collective action clauses in international bond contracts or the growing importance of standards and codes of conduct in the aftermath of the Asian financial crisis (for instance, core principles of banking supervision).