Financial systems in general serve not only to channel funds from those who have a surplus to those who have a shortage of savings, but they also serve to trade, hedge, diversify and pool risk. These functions help us to understand the economic benefits that can be derived from financial integration.
The clearest and perhaps the most important factor is the temporary confluence of favorable supply shocks over the last couple of years; by favorable supply shocks, I refer to developments that have recently lowered the prices or slowed the rate of increase in the prices of specific goods, unrelated to the overall balance between supply and demand in US labor and product markets.