It is on this theme that I would like to concentrate my remarks today. Markets and banks The current crisis marks the reversal of a decades-long transition of the global financial system from being primarily relationship-oriented and dominated by banks to being primarily transactions-oriented and dominated by financial markets. This model had the potential to price risk and to allocate capital more efficiently.
In trying to determine what the level of potential output might be, economic analysts usually look at the relationship between output and the primary inputs of capital and labour. By capital, we mean here the capital stock, or the real value of existing capital equipment.