Tyndall: The global economic tour

In fact, although we find that the number of "players" within the global financial system has been dramatically reduced over recent years, it seems that the financial system's ability to create leverage appears undiminished and by some measures we can suggest that credit growth within the financial markets has been growing at rates which seem worryingly reminiscent of the mid-2000s credit excesses.  Hence we would attribute much of the recent improvement in financial markets to this flow of funds, rather than necessarily an improvement in economic fundamentals. 

While this credit-fuelled rise in asset prices may have some positive wealth effects for households, which may have been the intention of the world's central bankers who have allowed the new credit boom to evolve, we also suspect that the credit institutions' apparent concentration on lending to other financial institutions is to an extent crowding out real world borrowers.  Therefore, we are not certain that the credit boom within financial markets is of much real benefit to the wider economies and we certainly doubt the authorities' judgment in allowing us to return to a situation that is reminiscent of what existed just prior to the Global Financial Crisis.