The importance of the financial sector in all national economies that participate in the global financial markets has increased remarkably … But all of them, whether highly organised, like the London Stock Exchange, or highly informal, like the money changers on the street cor-ners of many African capitals, serve the same basic functions. 1 Technological innovations lowered the costs of international transactions. In fact, the financial crisis quickly developed into a full-blown global recession, with Stock exchanges and several currency markets in free fall at the time of writing. financial resources to make ever-larger profits for them-selves and their customers as a global securities market has emerged. These factors, combined with the liberalizations of capital controls in the 1970s and 1980s, led Financial markets take many different forms and operate in diverse ways. THE ECONOMICS OF MONEY, BANKING, AND FINANCIAL MARKETS Twelfth Edition Frederic S. Mishkin Columbia University New York, NY A01_MISH3821_12_SE_FM.indd 3 27/10/17 5:49 PM Capital Markets: Growth Industry Global Financial Asset Choice Set: May 31, 2016 and Projected to 2050* 4 *Projected cagr as shown above based on our historically derived assumptions. Financial innovations, such as the Eurocurrency markets, undermined the e ectiveness of capital controls. 1) Barclays fixed income indices data as of May 31, 2016 except U.S. commercial and industrial loans (May 25, 2016),