He thereby acknowledges that at least for economies with small financial sectors floating exchange rates are feasible in the long run only if capital-market integration is slowed down.
An even stricter test of capital-market integration, and the one on which the flows of saving and investment really depend, is that real (ie, inflation-adjusted) interest rates should be equal across countries.
While domestic strengthening of institutional frameworks for the financial and corporate sectors is no doubt required, there is also a need for an architecture -- some sort of international "public good" -- to maximize the advantages of international capital market integration while mitigating its risks.