The homing instinct is usually associated with the animal world. Yet at times of crisis the animal kingdom comes to the financial markets – witness events since the credit crunch erupted in August 2007. As greed gave way to fear, investors and bankers behaved like so many homing pigeons, inflicting a dramatic reversal on financial globalisation as they retreated to their domestic markets.

At the same time the recycling of the excess savings of current account surplus countries in Europe, the Middle East and Asia to finance the deficits of the high spending countries of the anglophone world is creating increasing tensions, with China initiating a debate on the creation of a super-sovereign reserve currency to replace the dollar. Against this background the future of financial globalisation looks more and more uncertain.

The extent to which the tide has turned is evident in yesterday's figures from the Bank for International Settlements, the central bankers' bank, which show that cross-border lending by banks shrank by $4,800bn (€3,600bn, ￡3,200bn) to $31,000bn in the nine months to last December, the sharpest fall on record.