International integration is a financial concept in which countries have an ever greater number of financial transactions, investments and interests outside their borders. Through financial integration, nations become increasingly financially interdependent.
Financial integration is dependent upon the removal of restrictions such as tariffs and trade quotas. Privatization programs, free-trade areas and liberalization policies generally help to reduce these types of restrictions.
Advances in technology have enabled and facilitated international trading and investments. Individuals and governments may now easily gather and analyze foreign financial information as well as search for and complete transactions.
National governments are moving towards international integration in greater strides through the choice of their holdings. The U.S. government, for example, now has billions of dollars worth of assets in foreign currencies as well as billions of dollars worth of foreign liabilities. This makes the U.S. more susceptible to foreign events as well as more financially interdependent.
