In general, three drivers of financial integration can be identified: market forces, collective action, and public action. These reflect the complementary role of private and public sector action in this process. BIS Review 45/2006  1  Market forces are the natural origin of financial integration, mainly through economies of scale and scope as well as technological progress.
Collective and public action comes into play when market forces alone are incapable of removing inefficiencies – on account of “network externalities”, for example . The existence of network externalities has two implications: Firstly, national financial infrastructures have developed individually over a period of decades. Changing these structures is often associated with switching costs – at least in the short run.