BIS Review 110/1997  -2-  The persistence of budget deficits and large external imbalances, the rapid advances in data processing and telecommunications, financial innovation and the activity of institutions that collect and invest savings on a world scale all contributed to the creation of a single, global market for currencies and finance.
The harbinger of this development was the growth of the Eurodollar market, which had been boosted in the 1970s by the recycling of the surpluses of the oil-producing countries. The new conditions made it possible for countries to adopt a gradualist approach to correcting budget and, above all, external deficits; it was no longer necessary for saving to equal investment in any given period.