The globalisation of the financial markets following the global financial crisis

In this article, Deputy Governor Karolina Ekholm describes how the international integration of the financial markets around the world has developed since the global financial crisis. The process of internationalisation that began in the early 1980s appears to have come to a halt after 2008. This is reflected, for instance, in the fact that European banks have reduced their lending on foreign markets and that activity on the interbank market has declined. The author discusses what advantages and risks can be found in financial integration, as well as how they may be affected by the international regulations emerging in the wake of the crisis. In particular, she focuses on developments at EU level, where the endeavour to maintain financial stability on an integrated market appears to require a higher degree of joint supervision and regulation. Her conclusion is that a reinforced European banking sector, with a smoothly-functioning bank union, could have beneficial effects on the Swedish economy, regardless of whether or not Sweden takes part in the bank union.

The article is included in this year's first issue of the Sveriges Riksbank Economic Review, which has been published today.