Three sets  of policies have been implemented to achieve this objective: (i) improved loss absorbency and resilience, (ii) improved recovery and resolution, and (iii) improved supervision. Assessing the effects of reforms requires a distinction between private as well as social costs and beneﬁts.
Countries with developed domestic financial systems, open trade, good governance and sound macroeconomic policies have not experienced greater volatility due to greater integration. Those without these “thresholds” have. 3 Reasons for globalization The shrinking importance of geographical distance due to technological progress is one important aspect of the increased interaction in the world economy (slide 4).