This paper measures how well international financial markets allocate savings among investment opportunities world-wide by measuring the correlation between national domestic savings and investment ratios. It concludes that financial markets have become more efficient in this respect since the 1960s, but that even in the 1990s capital was a lot less than completely mobile. The paper discusses the obstacles to capital mobility, including official controls, cultural and legal obstacles, and monetary and financial instability. It explores the difficult issues that countries have to face when choosing an exchange rate regime and suggests that the changing nature of the foreign exchange market is an important influence on such decisions.