Healthy financial sector development is thus supported by this activity if only by increasing the scope for risk management. The resulting control over volatility in portfolios of financial institutions has, in turn, the effect of improving the risk appetite of market participants for a higher volume of business.
Secondly, Partner states may no longer be able to enact policies to meet their specific needs and interests if such policies are in conflict with regional initiatives. For instance, use of fiscal or monetary policy to pursue a specific country development agenda. Thirdly, it may be difficult for national governments to create and implement policies based on their own particular needs.