Abstract
This chapter discusses the twin questions of legal diversity and legal harmonization from the perspective of international financial integration. It begins by presenting the conceptual elements of international financial integration, what is meant by that and what its basic components are in the various markets that comprise the international financial system. It summarizes a large amount of empirical evidence that quantifies the internationalization of global securities markets in debt and equities, bank lending and foreign direct investment in the financial sector and highlights the remaining pockets of incomplete financial integration. It brings together the informal process of regulatory convergence and the many tracks of financial integration, with special emphasis put on liberalization efforts in the World Trade Organization. The chapter discusses the international policies and legal instruments that aim to remove the remaining legal barriers, particularly the structural impediments raised by the economic effects of legal diversity and over-regulation. Keywords: foreign direct investment; global securities markets; international financial integration; international regulatory convergence; legal barriers; legal diversity; legal harmonization; trade liberalization; World Trade Organization (WTO)
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