As things stand now, each country's financial system is being sustained and supported by its own government. Governments are primarily concerned with their own economies. This gives rise to financial protectionism, which threatens to disrupt and perhaps destroy global financial markets. So regulations must become international in scope. Otherwise, global financial markets will be destroyed by regulatory arbitrage.

The given passage discusses how each country's financial system is currently supported by its own government, which leads to financial protectionism that threatens global financial markets. The author then argues for the necessity of international regulations to avoid issues like regulatory arbitrage. Option C best captures the recommendation (the need for international oversight) made by the author. 

Option A introduces "national sovereignty," which isn't explicitly mentioned in the passage. Governments do prioritize their economies but the core argument is about the need for international regulations, not sovereignty conflicts. Thus, we can eliminate this choice. Similarly, Option B correctly identifies financial protectionism as harmful but misses the main solution (international regulations) and focuses narrowly on globalization’s damage. Option D also mentions countries protecting their interests (a premise) but omits the critical call for international regulations.

Hence, Option C is the best choice.