The major benefit accruing from international financial markets is more financial interconnection among different nations of world. It can also lead to a deeper integration of developing economies with the international financial markets. Especially the developing economies would be able to revamp and develop their financial system with the introduction of more complete, deeper, stable and better-regulated domestic financial markets because of their affiliation to international financial markets. Levine, (2001) suggests a better functioning financial system with more credit is likely to lead to faster economic growth.
Apart from direct growth benefits, development of international financial markets is likely to result in other collateral benefits like promotion of the development of domestic financial sector and imposing disciplines on the macroeconomic policies of the governments. It also leads to generation of more efficiency by encouraging competition and results in enhanced corporate governance and functioning of better governments. Since these benefits occur over a longer period, it is usual that the costs of globalization are detected more easily. The collateral long-term benefits of international financial markets