The deregulation of financial markets in various nations in the 1980s brought about not only a qualitative change in their operation but also a greater integration among these markets. These changes enabled the free flow of financial resources across borders, and private and public institutions in each economy now have the ability to draw on the strengths of foreign markets to meet their individual needs. But many observers in Japan, Europe, North America and elsewhere fear that the new freedom has contributed to a greater instability in individual markets and the transmission of these swings...