Economic globalization progressed considerably in the 1990s with the opening-up of post-socialist eastern European countries for trade and capital flows as well as with the completion of the single EU market. Part of the single EU15 market introduced in 1993 was the liberalization of services including financial services. With EU eastern enlargement in 2004, there were steps towards an EU25 single market. However, free movement of labour was postponed for most EU15 countries until 2011 (at the latest). In ASEAN countries, financial integration resumed after the 1997/98 crisis, and a broader integration strategy was envisaged. Both the EU and ASEAN are facing economic globalization in the sense that there is a long run increase in the trade of financial services, in foreign direct investment in the banking and insurance sector and a growing influence from global international organizations such as the IMF and the Bank of International Settlements (BIS).
Financial markets are important for economic development for many reasons, including the financing of capital accumulation, innovation and human capital formation. In his survey, Tsuru (2000) points to several channels through which financial markets can affect growth. Competitive financial markets contribute to
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the efficient allocation of capital;
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efficient intermediation so that savings flow to those investment projects with the highest yield;
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a rise in the savings rate (under certain circumstances).
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Welfens, P.J.J., Keim, M. (2009). Financial Market Integration and Growth in the EU. In: Welfens, P.J.J., Ryan, C., Chirathivat, S., Knipping, F. (eds) EU - Asean. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-87389-1_6
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