The IMF sounds a cautious note on financial globalization:
While, in principle, financial globalization should enhance international risk sharing, reduce macroeconomic volatility, and foster economic growth, in practice the empirical effects are less clear-cut. Risk sharing has increased somewhat in advanced countries—consistent with their greater levels of financial openness—but has not been noticeably affected in emerging market and developing countries. International financial integration has not increased macroeconomic volatility or crisis frequency in countries with well-developed domestic financial systems and a relatively high degree of institutional quality; it has, however, increased volatility for countries that have failed to meet these preconditions or thresholds. The link between financial globalization and economic growth is also complex. Although foreign direct investment and other non-debt creating flows are positively associated with long-run growth, the impact of debt seems to depend on the strength of a country’s policies and institutions.
The paper’s empirical results are broadly supportive of the IMF’s “integrated” approach, which envisages a gradual and orderly sequencing of external financial liberalization and emphasizes the desirability of complementary reforms in the macroeconomic policy framework and the domestic financial system as essential components of a successful liberalization strategy. For countries that do not yet meet the relevant thresholds, the focus of policy makers should lie squarely with improving the relevant economic fundamentals. In addition, opening up to foreign direct investment (FDI)—a type of flow that appears to be beneficial even for countries with relatively weak fundamentals—would seem desirable at an early stage. Liberalization to other types of flow should be delayed until country fundamentals are more in line with the relevant thresholds. For countries that are closer to meeting the thresholds, opening to debt flows is unlikely to have strong adverse effects on volatility, though, equally, growth benefits have not been identified as being particularly significant in this case.
This is a clear statement of the new conventional wisdom on financial globalization: reaping the benefits is by no means automatic, and you need to have the complementary institutions to make sure you do. This parallels a similar line on trade liberalization from across the street, which also takes the view that the gains are contingent on supporting institutions.
What I think about all this is here.