There is less divergence. The number of banks accessing markets is going up. But there is still a long way to go. We think establishing a complete banking union would help along that way. Will there be a new round of 3-year LTRO’s? There is a difference between banks that otherwise have trouble attracting money and banks asking for ECB-financing.
If we look back to the middle of the 1980’s, the last time global imbalances were considered to be a problem of the world economy, the current account deficit of the United States peaked at 3.5% of GDP. Looking at the details, however, there are some interesting differences between 2004 and the middle of the 1980s.