financial globalization:recent phenomenon?(2)

while the global capital market did begin to grow in the 1960s,it did not reach the previous high levels of the earlier period until well into the 1980s.while the two growth periods are quite similar in terms of the changes in communications and transportation that accompanied the growth spurts ,they do differ in terms of the type of foreign exchange regime in place and the challenges facing policymakers.the earlier period operated under a gold standard,while the current system contains of a variety of systems anchored by flexible exchange rate arrangements between the two periods.in the earlier period ,the volume of capital flows to developing regions was roughly equal to those flowing to the more wealthy countries.today ,relatively little capital is flowing to the developing countries ,and the bulk of the capital flows are between wealthy countries and are intended to reduce risk through asset diversification and the fine-tuning of portfolios.