Along with the evolving pattern of cross-border flows, we have also seen profound increases in the absolute size of current account balances in both industrial economies and emerging market economies. A more integrated world economy brings with it the prospect of a more productive, yet competitive world economy.
The increase in the ties between national financial systems as well as the greater sophistication of financial markets and financial market instruments allow risks to be shared more broadly and capital to flow to where the returns are expected to be the highest.