When we talk about financial globalization, there are four major factors to be considered. They are:
•Advancement in information and communication technologies: Technological advancements have made market players and governments far more efficient in collecting the information needed to manage financial risks.
•Globalization of national economies: Economic globalization has made production, consumption, and investments dispersed over various geographic locations. As barriers to international trade have been lowered, international flows of goods and services have dramatically increased.
•Liberalization of national financial and capital markets: Liberalization and fast improvements in IT and the globalization of national economies have resulted in highly spread financial innovations. It has increased the growth of international capital movements.
•Competition among intermediary services providers: Competition has increased manifold due to technological advancements and financial liberalization. A new class of nonbank financial entities, including institutional investors, have also emerged.