This term describes the phenomenon of funds fleeing across the national frontier in search of greater safety. The driving forces behind capital flight include actual or feared monetary instability, confiscatory taxation, war and revolution. Examples of the phenomenon can be found through several centuries. A low level of liquidity and high costs of international communication at first limited the potential scope of capital flight. The earliest ‘modern’ example was the largescale movement of French funds to London during the Franco-Prussian war. Capital flight has reached in the twentieth century a frequency and importance previously unseen.