Presentation by Mr Hyun Song Shin, Economic Adviser and Head of Research of the BIS - Basel, 25 June 2017.
Trade and financial openness go together, and globalisation of the real economy entails a very substantial amount of financial globalisation. Global value chains illustrate well how complex trading relationships need much greater financial resources to knit the production process together. Nevertheless, it is also true that the global financial system is subject to procyclicality and excesses, just like the domestic financial system is. If left unchecked, the build-up of financial excesses can result in costly financial crises. Financial crises cast a long shadow on the global economy for years at a time. Ensuring a resilient financial system is the best way to reap the benefits of real globalisation.
The views expressed here are my own and not necessarily those of the BIS or its member institutions.
