Global imbalances and the financial crisis

Quarterly Bulletin 2009 Q3
Published on 21 September 2009

By Mark Astley, Julia Giese, Michael Hume and Chris Kubelec of the Bank's Monetary Analysis Division.

The recent financial crisis has put the spotlight on the rapid rise in credit which preceded it and the macroeconomic context in which it developed. This article examines the contribution of international savings and investment imbalances to the crisis and how these imbalances have evolved since its onset, focusing on the UK experience as a deficit country over the past decade. It also briefly discusses some implications of the crisis for global imbalances over the medium term.

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