We know that U.S. external indebtedness—even with that country's reserve-currency status—cannot keep growing indefinitely as a share of its GDP. Eventually, investors will balk at increasing their exposure to the United States. Should that occur suddenly, we could see economic growth plummet and world financial markets become disorderly, threatening global financial stability.
The Financial Services Authority UK has recently published its Financial Risk Outlook 2009 and has highlighted that the tighter economic conditions could increase the incidence or discovery of some types of financial crime. This poses real challenges to the financial sector and brings the importance of effective regulation to the forefront.