Among the advanced economies that largely adhere to the principle of unrestricted capital mobility, we see countries with independent monetary policies and floating exchange rates and we see countries opting for a shared monetary policy through the elimination of national currencies in the form of the European monetary union.
For some major emerging economies, restrictions on international capital mobility are imposed in order to target both a stable exchange rate and some independence in domestic monetary policy. Second, as proposed by Dirk Schoenmaker, the financial trilemma has it that only two of the following three options are possible: financial stability; independent national financial policies; and cross-border financial integration3.