None of us should be happy about how events have unfolded over the past five years, and none of us could deny the claim that the international financial system is prone to periods of extreme financial turbulence that leave lasting economic costs. At first, this instability was attributed to deficiencies in the financial infrastructure in some emerging market economies.
Soon, however, more thoughtful people saw the source of the instability as being the combination of two things - large movements of short-term capital taking place in countries that had small and not very well developed financial infrastructures.