As regards the reduction in the cost of capital, more developed financial systems can raise the fraction of savings channelled to investment. So I now turn to the link between financial integration and financial development. The economies of scale involved in financial intermediation can foster the expansion of the established intermediaries and markets of the financially developed regions, thereby leading to further financial development.
•  Second, the complexity of structured finance products and the imperfect information about the risk characteristics of the underlying assets made difficult the proper assessment and management of associated risks. •  Third, as a result, financial institutions and other investors relied excessively on the ratings of complex structured credit products by credit rating agencies (CRA).