ABSTRACT. Andersen and Moreno assert that financial integration involves some well known trade-offs: policymakers must weigh possible gains from faster growth and the opportunity to smooth consumption from country-specific shocks against the greater exposure to external shocks. On Hawkins's reading, the liberalization of foreign borrowing has made quantitative loan limits on domestic banks less effective in restraining overall borrowing by firms. Mariano and Villanueva contend that for those monetary policy approaches that use the interest rate as the policy instrument, expectations of future short rates influence long rates right away via term structure effects.