The Risks of Integration: the Rise and Recent Fall of Emerging Markets

The increased importance of finance is the main characteristic of the current capitalist system. At the international level, the increase in cross-border financial transactions signals what has been called ?financial globalisation? or ?international financialisation?. The rise of this system is associated with the emergence of money managers? professionals seeking the best possible return for their portfolios worldwide. From the 1990s on, this liquidity has started to reach those developing countries that have liberalised their capital accounts and has since then been flowing in marked cycles. Today?s slumping stock markets and major exchange rate depreciation in several emerging markets may signal the end of one these cycles. (?)