As symbolized by the rapid expansion of derivative transactions, we now live in a world where  BIS Review 26/2000  2  international capital flows have become extremely complex and the speed at which a shock is transmitted across borders has accelerated.
In such a world, it is not possible for the central bank of any one country to ensure integrity of the international financial system. This can be easily understood if we recall such problems as the liquidity risk involved in foreign exchange and the Herstatt risk in cross-border settlements.