1970 Globalization of Financial Markets and the Washington Consensus Vs. Beijing Consensus

Political Economy
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Political Economy
Financial Markets (the movement of money, not trade) significantly globalized in the 1970s and forward. How might we explain this phenomenon?
A financial market is where people trade financial securities and other assets at a low transaction cost. A financial market encompasses the foreign exchange, derivatives, futures, insurance, money, and bond markets. In the 1970s, the globalization of financial markets experienced drastic growth due to factors like demand for a mechanism to intermediate cross-border flows, technological development, a decline in barriers to international trade, increasing liberalization rules governing the entry of foreign entities into domestic capital markets, and increased capital mobility.
The impetus for a globalized financial market began when Britain and Japan began to deregulate the capital and exchange markets in the late 1970s. This was motivated by increased foreign trade and global collaboration on universal societal problems through the emergence of bodies like the United Nations. In 1979, for instance, the UK dismantled the investment dollar premium system, while in 1980, Japan deregulated the foreign exchange markets (Broner & Ventura, 2016). Other countries like Brazil, Korea, and India took steps to allow foreign investment into their capital market through closed-country funds. These actions allowed citizens of respective countries to invest freely in foreign securities.
Changes in technology have played a vital role in the globalization of financial markets because they have enhanced the efficiency of communication and financial transactions. The emergence of computers and telecommunication in the 1970s provided the communication and financial processing tools needed to enhance financial flow across borders. Other innovations that fueled th...