Monday, March 11, 2013

Financialisation and Globalisation

Financialisation is a major component of recent globalisation but it also represents a key danger to the sustainability of global economic interconnection.

This recent graph from the NYT based on McKinsey research, shows how big a hit financial flows took from the financial crisis. It also shows just how rapidly financial flows increased in the lead-up.

Every element of financial flows - direct investment, equity, bonds and loans are well below their  peaks before the crisis - with loans taking the biggest hit. Emerging market economies have done relatively better, but investment was down last year.


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