External factors are deregulation and changes in information technology. Internal factors are the information-intensive character of the relationship between the financial firm and its client as well as the comparative advantage of the financial firm and the potential for scale economies. Financial internationalization and regulation interact in a dialectic fashion. The interaction is both at the macro-level and at the level of the firm. It also weakens the grip on the individual financial firm.
Governments react by coordinating policies at a regional level.
However, as the process of making up such policies is hampered by many pitfalls, it cannot neutralize the effect of increased financial internationalization. A distinction is made between two aspects of the globalization process as currently being discussed. In present society a gap exists between general problem awareness and uncomfortable feelings about environmental deterioration on the one hand and a practically-oriented belief in people's own potential and possibilities as the basis for dealing with the ecological problem on the other. Whether and how this gap can be bridged by the build-up of knowledge, as well as its cultural and institutional incorporation, forms the theme of this article. I shall elaborate this theme on the basis of an analysis of society's reactions to the discovery of the stratospheric ozone depletion.