the 2008 global financial crisis
shocked the whole world on September
15th a financial company called Lehman
Brothers in New York claps in few hours
the shock reach to the Asia when mark
opens their then move to Europe next
morning go back to the United States in
48 hours the global financial system
stopped
meltdown instruments the global
financial market lost 26 trillion u.s.
dollars in teto almost half of set pawns
the marketization of global market
end-of-year the whole world was in
recession as a directly consequence
67 million people lost a job since then
most if not all are innocent bystanders
I work for the International Monetary
Fund or Monday is safeguard a global
economic and financial stability we were
shocked we were shocked because so many
innocent people suffer and a global
financial system the safe teenis
straightened the speed of the spread the
power of the damage clearly it clearly
tell us the world is different but we
have to know to ensure this crisis will
not happen again
so quickly we started research projects
we call interconnectivity now I'm going
to talk some of these results we found
with you today we found they're both
interesting and stunning we first want
to identify who are the major economic
players in the world
so let's start with a map this is the
map we see every day the countries like
the US and Canada and West Russia and
China in Easter all big countries but
what if are they still the same an
economic war so we rescale the countries
by economic activities re by GDP the map
changes you see really different and the
Russian become very small so us the
Canada but the US and China remain big
even bigger because the largest second
largest economy in the world we also
want to see who are the major trade
players so resize country but
international trade activities indeed
the map changes again this time Europe
become very big we're more interesting
to see who are the financial centers so
we resize countries or economies but
it's pause for the financial captive law
the money flow indeed the map changes
again you see there's a quarter back
shape in the center of Europe and we
know what is this country it is a
Luxembourg
Luxembourg is a such a tiny country in
the normal map but it's such a big
financial power in the global financial
map that's another shape in Asia and
then we know what is this economy it is
a Hong Kong China I heard a thing couple
it's not hope which are the once again
such a small in a normal map but so big
because the financial gateway for China
and the mainland China you see with the
1.3 billion people the country I come
from become very small what does this
tell us it tell us today the country's
position in the world is now defined by
a size of a land but by its economic
strength we move further because we want
to see how the country associates
connects them to each other so go back
to the map and we do a lot of
calculations with all the painters who
try to find correlations closeness
between among the countries and with all
those calculations with fun country now
say moving together and indeed today's
global countries divided them into three
big groups we call clusters the first
group is a service clusters Muslims
advanced economies like us in the UK and
the second group as a manufacturer group
feeding the very mature age of supply
chain but wait you will see Brazil and
Chile also in their map why there
because many Latin country today export
commodity to the global supply chains so
today economically many determining tree
belong to the Asia supply chain and the
third proof is oil group is energy
groups it's also very interest you see
Saudi Arabia Russia and the Nigeria's
they're all different in the different
part of the wall but they share one
thing in common
seppius energy what is tell us
it tells us the wall structure is very
different from before before we divide
the country by income level by reading
but today the country proves himself by
one thing the product one more
interesting try to found whole country
connect to each other because that's the
way is important to understand it a
little bit konami situations so we did
the more calculations we found a fairly
fascinating structure we caught a closer
structure this is the stylized Clausen
structure in those countries
everything's represent our countries and
country close to each other form a small
clusters their leader in their classes
in green color we called gay people and
the gay people will bring these small
cluster to the media and the big cluster
and the big cluster they keepers were
bringing them to the pool in red color
today is a whole wall the all economic
activity is actually is happens around
the pool the big countries let me give
you one real example there's a small
Nordic clusters the country like Estonia
Latvia Finland and Sweden's assume a
country in Estonia or to produce a very
innovative products in either hundred
million dollars captures what do we do
as well pick up the phone
Paul Wall Street the people in New York
place or the brain of an impact Estonia
no that's not way what we found is the
Estonia will first to reach out to
Finland and Sweden their gatekeeper and
the Sweden and the finger were further
carried order move to UK and the United
States the globe of nation centre this
cloth of structure fundamentally changed
the global economic and financial
activity behave
there tell us a few things number one
the relationship between the country is
no longer the point-to-point linear
relationship if it's a pointer point if
something goes wrong you will see only
impact on this to conjure here Estonia
and the United States in these
structures something goes wrong in one
country the whole system effect
the second issue is because it's close
of structure intact if it increased
dramatically among the process between
the cluster interactive factor become
more important and the furthering
politicians will learn Francis's studies
because it's closer structures so the so
country's economic activities may impact
as a country seemingly unrelated we cost
me over now that's become the key factor
for global economic financial situation
today let me give you another example
u.s. is being the largest global economy
and a financial center that we try to
understand what is the u.s. economic
activity spit over to the whole world
indeed the big assume 1 percent of u.s.
GDP equals to the job what is impact on
her wolf across all the world that's a
very interesting who received the
largest bill from United States well you
see Canada and Mexico well that's
understandable because they are not only
enables their economic and financial aid
closely linked to each other through the
free trade zone the whole country
received the third largest spillover
frying that estates it's a Saudi Arabia
Wow you will say why Saudis thousands
miles away there's so different
economies yes because so this has a
fixed exchange rates linked with yes
dollar and the Saudis are your
production and investment supreme
chilling with US market Hui the third
the fourth the Inkpen receiver countries
mister China once again sold as a miles
away is a very different come trying to
manufacture Aloha
but us involving so many trade and train
financings and both of us in China pull
when sins have been cool the impact to
each other more importantly if we take
in direct impact into the considerations
the spillover become ever larger the
color Ingrid show us the indirect impact
today is a much bigger than directly
impact it can be double or quadruple for
directing path for many countries for
example in the country here in France
now we understand why the 2008 the
global financial crisis happened there
way with the human breast collapse in
New York because yours to being the core
of a global financial centre so quickly
distress to the whole financial systems
economic way is also rich to Saudi and
China quickly spread to the energy
cluster and a manufacturer closed
shortly they brought a whole global
economy and a financial system Tom it is
a changing war and this changing world
particularly the closer structure has a
profound implications to all of us for
us at the International Monetary Fund we
learn from these studies because it's
closer structure generator spill over
and provide opportunities and the
manager financial stability is a key for
sustainable growth and for job so we'll
quickly relook at the resources to put
more or more efforts on the gatekeeper
and poor countries we do more
multinational surveillance and we
develop products like an early warning
exercise like external report like spill
over reports a vulnerability rolls on
top of things advice authorities tell
them what possible shocks they may
receive how they prepare for the shots
and provide insurance to them this is
also have important implication to the
ordinary people that you
and me the study says today where we are
is not important we all linked to the
whole wall we all face the global
competition or possessing is defined by
our strengths or inference is defined by
the way we connect to the whole world
it's also important for us to remember
if you want the people job and the
savings safe we have to pay more
attention and global financial economic
activities these are clusters structures
produce the post upside benefits and
downside risks depends on whether we can
work together or can learn more who can
share more indeed we have to work
together we have to learn more we'll
have to share more thank you very much