Download Financial Markets and Global Capital Flows: A Decade After the Crisis and more Slides Banking and Finance in PDF only on Docsity! “The World in 2020” - Finance Docsity.com For 20 years, up to the crisis, finance grew much faster than the real economy 1 Excludes debt write-downs of $0.28 trillion in 2007 and $0.98 trillion in 2008. 2 In current exchange rate terms the drop in global financial assets would have been $22 trillion in 2008, or 11 percent of global financial assets. Note: Figures may not sum due to rounding. Source: McKinsey Global Institute, Global capital markets: Entering a new era, September 2009. Global financial assets $ Trillion, using 2008 exchange rates for all years Docsity.com In the UK, bank leverage grew sharply from 2003 Source: Bank of England, Financial Stability Report, 28 October 2008. Major UK banks’ leverage ratio, %, 1998 - 2008 Note: Leverage ratio defined as total assets divided by total equity excluding minority interest. Excludes Nationwide due to lack of interim data. Docsity.com Household debt, % of GDP, 1987-2007 Source: FSA, ONS, Federal Reserve, Eurodata, Datastream Household debt escalated, especially in the UK and US Docsity.com But mortgage lending has stagnated since the crisis Source: FSA, Financial Risk Outlook 2010. Note: For major UK lenders (Banco Santander, Barclays, HSBC, Lloyds Banking Group, Nationwide and Royal Bank of Scotland) the pre-2009 split of gross lending data is estimated using loan approval values for house purchase, remortgaging and other advances. Lending Panel data is used in 2009 as reported by the major UK mortgage lenders. Data for major UK lenders include both sterling and foreign currency lending, total mortgage lending and other lenders data include sterling lending. All are expressed in sterling terms. Seasonally adjusted. Gross new mortgage lending, £ Billion, Jan 2007 – Jan 2010 Docsity.com Top Four Centres GFCI Ratings Over Time Source: City of London Corporation, Global Financial Centres 7, March 2010. London and New York still lead the field but the gap between them and the Asian Centres has been steadily cut Docsity.com Chinese financial centres are now high in the global league tables Source: City of London Corporation, Global Financial Centres 7, March 2010. Docsity.com London employment trends, millions, 1971-2008 Note: The annual counts are of jobs not workers and because of continuing inconsistencies between the procedures used for these and the benchmarks provided by Census and Labour Force Surveys. Source: London School of Economics, London’s Place in the UK Economy, 2009-10, October 2009. Employment in London has grown rapidly Docsity.com London earnings for full-time workers, ratio of the UK average, 1971-2008 Source: London School of Economics, London’s Place in the UK Economy, 2009-10, October 2009. But London’s relative prosperity seems to have stopped increasing Docsity.com Conclusions • Finance will not grow as rapidly in the next decade as it did in the last two • The financial world is becoming multipolar • The crisis has speeded up the eastward trend in financial activity • London remains well-placed in its time-zone, unless regulatory and tax errors are made Docsity.com “The World in 2020” - Finance Docsity.com
