Hence, it would be premature to regard the financial crisis, and the economic crisis directly linked to it, as having already run their course. Clearly, a protracted period of stagnation in the major economies would pose a substantial risk to financial stability.
Financial integration contributes to the development of the financial system by increasing competition and expanding markets, which results in lower intermediation costs and a more efficient allocation of capital. These effects, in turn, raise the potential for increased economic 1 growth.