The most sobering lesson of the global financial crisis was that developments expected to increase resilience – in that case, the “originate and distribute” model of finance – turned out to reduce it. Does a similar danger now threaten stability? Yes. The next round of global illiquidity might derive from foreign currency bonds of non-financial companies of emerging economies. The centre would be asset managers, not banks.

Last summer’s “taper tantrum” was a foretaste. The indication by the US Federal Reserve that it was considering a reduction in the rate at which it would expand its balance sheet had a dramatic effect on emerging economies. As the International Monetary Fund noted in its October World Economic Outlook: “Expectations for earlier US monetary policy tightening and slowing growth in emerging market economies prompted major capital outflows from emerging markets during June 2013.” The results included a widening of risk spreads, equity market falls and big declines in exchange rates against the dollar.

Why did turmoil follow the mere possibility of a twitch towards tightening in Fed monetary policy? At a conference on Asia at the Federal Reserve Bank of San Francisco, Hyun[SONG?] Song Shin of Princeton University, among the world’s foremost financial economists, suggested an answer: the growth of demand for the private sector bonds of emerging economies.