Advantages

 Credit availability
o Financial integration allows capital to flaw from wealthy countries
 Enhance efficiency and stability of the financial system
o Better knowledge, experience, completion and professionalism
o More resilient to negative shocks due to access to foreign savings
 Enhance competition in the banking sector
o Better interest to savers, access to wider population due to new tech-based
services, improved services and service fees,
 Promote foreign investment
o High reputation and trust by foreign investors
 Promote entrepreneurship
o Better access to loans to entrepreneurs/businesses
 Due to diversified capital and funding base
 Better experience

Disadvantages

 Infant industry argument

o Viable domestic banking sector will be threatened
 Foreign banks have more capital, experience, and better reputations
o Credit allocation by foreign banks will affect government priority sectors
 allocation to large scale industrial, real estate and service enterprises and
instead of agriculture, small-scale and cottage/micro enterprises
 Focus on major urban centers instead of rural banking and favor best companies and sectors.
 Less domestic saving as foreign banks might use foreign money sources
 Limited regulation capacity
o They may serve as conduits for the inward and outward flows of capital through capital
and money market transactions
o Unmatched technological advancement