Capital markets and globalization

The article presents reflections on the effects on diversification possibilities, and on corporate governance approaches, in the light of the rapid international integration of capital markets. In Finland the barriers on international portfolio investments was removed as late as in 1993, and today foreign ownership of firms listed the Helsinki Stock Exchange exceeds 70% of total capitalization. This radical change in ownership structure, along with the institutionalization of asset management and stock ownership, has improved the possibilities for more optimal risk sharing trough diversification of investment assets. The mechanisms of shareholder monitoring have also changed radically. As in so many other European countries, the Anglo-Saxon corporate governance culture is replacing the old models of strong (bank, family or government) owners.