Furthermore, oilproducing countries, which had been in excess of funds, are now in shortage of funds, and this has caused a reversal in the flow of funds, creating considerable stress not only on the economic activity of these countries but also on global stock markets and foreign exchange markets.
Interbank funding, especially in foreign currencies Despite its importance for distributing savings to their most valued use, shortterm interbank funding, especially cross border may turn out to be the Achilles’ heel of an international financial system that is subject to wide variations in financial confidence. This phenomenon, which is all too common in our domestic experience, may be particularly dangerous in an international setting.