Indeed, Hogan and Pearce state, rather bluntly: “Financial intermediaries live upon imbalances”.9 At one level that is obvious – financial intermediaries or markets exist to transfer resources from savers to borrowers (and back again), which is to say that an imbalance between saving and investment at the level of an individual household or firm in the economy is matched against an equivalent imbalance of opposite sign in some other firm or household.
The deeper sense in which this “thriving” takes place in an international setting is that savers in one country lend their money to borrowers in another jurisdiction, about whom they know next to nothing, but feel safe in doing so because what they hold directly is an obligation of a large, wellknown, globally active bank, assumed to be safe.