Flourishing regional capital markets may depend also on a minimum convergence in fiscal policies. The coordination of fiscal policies may aim at, inter alia, establishing maximum limits to fiscal deficits, the prohibition of their financing with central banks' credits, the establishment of maximum limits to the public debt/GDP ratio. When divergences in these fields are excessive, market participants coming from different countries of the region cannot enjoy equal opportunities. In addition, it is important to harmonize the fiscal and incentives policies given their incidence on the movements of goods, services, capital and factors within a region. This requires a comprehensive process of concertation. The compromise elaborated in this process may eventually imply a commitment to intraregional consultations before adopting national fiscal measures.
A minimum level of harmonization does not imply uniformity. The latter is not only impractical but also undesirable. One of the driving forces of cross-border securities movements within any area may be exactly the divergent patterns of savings, equity supply and demand, fiscal deficits.