We are witnessing political reforms: deregulation of the domestic markets, liberalisation of border-crossing capital movements. We are witnessing technological breakthroughs in information and communications technology. All these changes are interacting, reinforcing one another and constituting a new real world. This upheaval presents great opportunities. The international capital markets can operate more efficiently. Market transparency is increasing.
Greater diversification of investment may help to allocate capital more effectively, in line with its marginal productivity. Risk management is becoming more efficient. The financial markets are better able to perform their transformation function. The markets are better able to reconcile savers’ and investors’ preferences with respect to maturities, batch sizes and risks.