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Financial Stability Paper No 12: The Future of International Capital Flows

Listed author(s):
  • Speller, William

    (Bank of England)

  • Thwaites, Gregory

    (Bank of England)

  • Wright, Michelle

    (Bank of England)

The experience of the past decade has demonstrated the challenges that international capital flows can pose for financial stability. The build-up of global imbalances (large net capital flows) was one of the preconditions for the recent financial crisis. Increased interconnectedness between countries’ financial sectors (large gross capital flows) created channels through which the initial shock could spread around the world. In these respects, the scale and volatility of international capital flows were crucial determinants of the depth and breadth of the crisis which followed Lehman Brothers’ demise.

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File URL: http://www.bankofengland.co.uk/financialstability/Pages/fpc/fspapers/fs_paper12.aspx
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Paper provided by Bank of England in its series Bank of England Financial Stability Papers with number 12.

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Length: 26 pages
Date of creation: 12 Dec 2011
Handle: RePEc:boe:finsta:0012
Note: http://www.bankofengland.co.uk/financialstability/Pages/fpc/fspapers/fs_paper12.aspx
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