Another important issue for the emerging market economies from a stability perspective is on account of the presence of foreign financial institutions. The regulators of emerging markets may not be fully equipped to understand the risk profile of a globally active institution operating in their countries. Risks also arise due to financial interlinkages between emerging and foreign financial markets.
2 Friedman, M. (1991), “The island of stone money”, Working Papers in Economics, The Hoover Institution, E-91–  3. 3 Jevons proposed a fourth function: being a standard of value (see Jevons, W. (1875), Money and the Mechanism  of Exchange, Chapter 3). But that fourth function is generally considered nowadays to be subsumed into the other three.