This tight banking posture may look good in the books of the banks, but it does not bode well for economic growth and innovation. As many here will know, the G20 met earlier this month in Seoul to find ways of strengthening the global banking and financial system.
Technology has practically eliminated physical divides, while financial engineering has allowed instruments to be specifically designed for certain stakeholders with certain needs at a certain point in time. As a result, financial markets today are complex and highly interlinked across national borders. This creates a value chain as much as it provides the channels for various spillovers.