Global savings glut or global banking glut?

Hyun Song Shin 20 December 2011

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Since Bernanke’s 2005 speech (Bernanke 2005), it has become commonplace to assert that current-account imbalances were a key factor in stoking the permissive financial conditions that led to subprime lending in the US. The ‘global savings glut’ is what Ben Bernanke called it. This phrase provided a powerful linguistic focal point for thinking about the surge in net external claims on the US on the part of emerging economies.

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Topics:  International finance

Tags:  global savings glut, global banking glut