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Write 6 pages thesis on the topic wto effect on taiwan. (Antkiewicz, 2004) In other words, the more internationalized the financial markets and the more liberalized the capital account, the more challenges the autonomy of monetary policy have faced. In fact, financial internationalization underlay both the Latin American financial crisis happening earlier and the East Asian crisis a few years ago. Experts and scholars, by drawing important lessons from financial crises, have, retrospectively, advocated a progressive approach rather than an aggressive one to financial internationalization. They have singled out relaxation of capital account controls as the bottom-line defensive measure and have even viewed a certain degree of re-regulation as necessary in the aftermath of financial liberalization and internationalization. (Cai, 2005) By doing so, the negative impact of rapid and large-scale international capital movements on a countrys economy can be minimized.

Generally speaking, financial liberalization includes cross-border flows of funds, personnel and commodities. In addition to opening the capital account, it also includes expanding offshore business, establishing foreign exchange call-loan markets, and allowing foreign bank operations and branches. The following phenomena, which are independent in itself but not exclusive of each other, illustrate the connotation of financial internationalization:

1) The restrictions on the currency exchanges and other international financial activities of residents and non-residents (including individuals, corporations and financial institutions) are relaxed Domestic banks are allowed to establish overseas branches. Domestic corporations can raise funds by issuing corporate bonds overseas or by investing overseas. Foreign banks and corporations are also permitted to conduct reciprocal financial businesses locally.