The financial turmoil  The episode of financial market turmoil that we have experienced since August 2007 provides a good illustration of how, in a globalised economy, an idiosyncratic shock can be propagated more rapidly and through a variety of new channels to seemingly distant countries and markets.
Indeed, the turmoil originated in a relatively small segment of the US economy – the sub-prime segment of the mortgage market – that has no obvious relationship with the Eurosystem’s sphere of interest.