Financial Structure, Saving and Growth: Safety Nets, Regulation, and Risk Reduction in Global Financial Markets

The momentous events of 1982 and 1994 in Mexico and Latin America and of 1997 in Asia force a reexamination of major issues about the proper design of financial structure and regulation in developed and developing countries. The First International Conference of the Bank of Korea, to consider the effects of globalization of financial markets, was planned months before recent problems became apparent in Southeast Asia. Recent events give the discussion greater urgency. It would be a mistake to ignore the lessons that can be drawn from this experience. I believe it would be no less a mistake to focus exclusively on recent problems and neglect the lessons of longer experience. This paper will comment on some lessons from the longer-term experience of developing and developed countries and draw some implications for financial structure as markets in developing and developed countries become more closely linked.