The flow of money through the global financial system is stuck at the same level as 10 years ago, raising new concerns about the strength of the economic...

The flow of money through the global financial system is stuck at the same level as 10 years ago, raising new concerns about the strength of the economic recovery following the financial crisis. In 2007, cross-border capital inflows into the G20 countries were equivalent to almost 18 per cent of those countries' economic output. In mid-2013 the equivalent figure was only 4 per cent. In dollar terms, G20 capital cross-border inflows have since fallen 67.5 per cent from mid-2007. You would have expected them to have fallen compared with the bubble years. What is surprising is the magnitude of the fall. Rather than seeing a rebound, we are seeing stagnation, said Susan Lund, partner at McKinsey. She warned the effects would be felt in the real economy and there was a chance that financial globalisation as we know it may never recover. Read the full article (AFR subscribers) (VIEW LINK)


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