So in contemplating the future of the international financial system, reforming the regulation of financial institutions, and understanding their behaviour, will be key, but it will be of equal importance to understand the underlying behaviour of the entities in the real economies. The role of official capital flows, in particular, is one element of the post-crisis world that seems to be becoming quite prominent.
Indeed, perhaps one of the most striking features of the international financial system is the size of official reserve assets that have been accumulated by what Hogan and Pearce would have labelled “Surplusia” – the countries that have run persistent current account surpluses.