It is nearly three years since the world became aware of the coming financial tremors. Since then we have experienced a financial sector earthquake, a collapse in economic activity and an unprecedented monetary and fiscal response. The world economy has now recovered. But this crisis is far from over.

As Raghuram Rajan of the University of Chicago Booth School of Business and former chief economist of the International Monetary Fund notes in a thought-provoking new book, the underlying “fault lines” are still with us.* More trouble may lie ahead. His voice is worth listening to: in 2005, he presented a controversial, yet now acclaimed, paper at the annual Jackson Hole monetary conference entitled “Has Financial Development Made the World Riskier?” His answer? Yes.

We already know that the earthquake of the past few years has damaged western economies, while leaving those of emerging countries, particularly Asia, standing. It has also destroyed western prestige. The west has dominated the world economically and intellectually for at least two centuries. That epoch is over (see charts). Hitherto, the rulers of emerging countries disliked the west's pretensions, but respected its competence. This is true no longer. Never again will the west have the sole word. The rise of the Group of 20 leading economies reflects new realities of power and authority.