A consequence of the forces for change I have just described has been a rapid expansion in the scale of financial activity relative to overall economic activity, and of international as against purely domestic activity. This in turn has generated unquestioned benefits in terms of more efficient global resource allocation.
At the same time, the greater masse de manoeuvre in financial markets has increased the power of market expectations to reinforce or undermine official polices. And the growth of the financial superstructure relative to the economy as a whole means that any sustained disruption to the financial system now has potentially broader economic effects than might have been the case previously.