Back in April 2007, I noted that the ever-closer integration of national economies and the rise in capital mobility had made the international system more vulnerable to changes in investor sentiment. I added that it was vital to strengthen the ability of the global economic system to absorb shocks to preserve global financial stability.
But few then could have imagined the magnitude of what eventually came to pass, starting with the subprime crisis in the summer of 2007, turning into a full-blown global financial crisis in the autumn of the following year with the collapse of Lehman Brothers, and culminating in a devastating impact on trade, production and jobs.