Globalisation in reverse

Synopsis

In this discussion, Ralph Atkins, the capital markets editor, presents research indicating a shift in globalization trends. He highlights that after the collapse of Lehman Brothers in late 2008, there was a significant contraction in cross-border capital flows, particularly in credit. The analysis shows that European banks were severely impacted during the eurozone crisis, leading to further declines in international lending. Despite a brief recovery in 2010 and 2011, current cross-border capital flows are only slightly improved compared to the aftermath of the 9/11 attacks and the Enron scandal. The findings suggest that globalization may be reversing, as the data indicates that capital flows as a share of GDP are lower than they were a decade ago. This raises questions about the future of global economic integration.