It would be quite damaging if the current crisis – the result of financial excesses – ended up further discouraging financial development in emerging markets. Financial repression ultimately is as harmful as financial excesses, because it does not support sustainable domestic growth. Globalisation has thrust together highly sophisticated markets and highly repressed markets.
What I mean is that we cannot predict precisely what will happen over the next few decades by extrapolating past developments. This notwithstanding, for the past two decades China and other emerging economies have been influencing the world economy to no small degree and they will continue to do so – also from a central banker’s point of view.