Credit market strains have intensified and spread across asset classes and banks, precipitating a financial shock that many have characterized as the most serious since the 1930s.
That fragility of nearly a century ago still exists today—as we saw in the aftermath of September 11th, when U.S. air travel came to a halt, financial markets shut down, and the economy weakened. The current turmoil in financial markets also poses great difficulty for the stability and reliability of those markets, as well as for the global economy. Credit market strains have intensified and spread across asset classes and banks, precipitating a financial shock that many have characterized as the most serious since the 1930s. These episodes are reminders that a breakdown in globalization—meaning a slowdown in the global flows of goods, services, capital, and  people—can have extremely adverse consequences.