Campanella, Miriam L.
The Changing Geography of Finance.Shifting Financial Flows and New Hubs: Shanghai and Paris?
Robert Triffin International, Centro Studi sul Federalismo, March 2018

Ten years after the global financial crisis, the recovery of the global economy remains bumpy and uncertain. Global trade, a major driver of globalisation, no longer appears to be growing faster than the world economy, opening questions over if it has passed its peak, or just is going through a cycle, perhaps associated with weak investment and weak commodity prices. In parallel, cross-border capital flows, one major indicator of financial globalisation, have substantially declined from the pre-crisis peak at 65 percent lower in absolute terms than they were in 2007. Even assuming that trade and financial globalisation have passed these twin peaks, does this mean that a de-globalisation trend is fully in place? The gyrations of capital flows during and after the recent financial crisis have declined somewhat, as shown by the weakening of uphill flows of capital to US Treasury bonds. Financial flows to emerging economies have stabilised, and reserve managers in central banks are taking a few credit risks compared to the usual “flight to quality”, as the economy emerges from a structural reduction in US Treasury bonds. These themes are reflected in the new geography of capital markets, which is beginning to see new large continent-sized jurisdictions taking centre stage. The purpose of this Report is to provide, through an overview of the structural factors that are shaping the new geography of finance, the rationales behind the emergence of Financial Hubs in Asia-China and Europe. [...]

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