Finance and Financial Sector Development

As interdependence between the developed (North) and developing countries (South) becomes greater, the economic policies of the North will invariably impact on the South. Globalization, defined as the increasingly free flow of ideas, people, goods, services, and capital that leads to the integration of economies and societies, has become a major force for global change, but much remains to be understood about the transmission channels and potential impacts.  The developing countries commonly complain that the global system is a ‘creditor-run financial system’ and as such, maintaining the stability of the financial system is more important for the advanced countries than mitigating financial crisis in any particular country.