But the worst has not happened. Financial markets, while hardly brimming with confidence, have recovered somewhat over the past couple of months. Banks are able to access term funding markets again, albeit at higher cost. High-frequency gauges of business conditions and confidence have stabilised over the past couple of months in Asia and North America, and even in Europe.
4 Above all, it is difficult to predict whether and at what price markets are prepared to contribute more or less indefinitely to the transfer of resources between the various regions of the world. As I have just indicated, however, this is not just a matter of how private economic agents behave. Central banks are also players in this game.