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While these trends tell us something about relative patterns of global interconnection, they leave unanswered the question of whether global finance is a truly integrated network. To gauge that, consider an alternative measure of global capital market integration – the correlation between national saving and investment rates. From Feldstein and Horioka (1980), we know that this correlation provides a proxy for capital market integration. For example, a savings/investment correlation of one indicates a closed capital account: all domestic investment needs to be fully financed from domestic saving. At a global level, this  2  BIS central bankers’ speeches  would signify something close to global financial autarky. By contrast, a correlation of zero implies that domestic investment can be fully financed on global capital markets. This would signal something close to perfect capital market integration. So saving/investment correlations of zero and one define the outer limits of global capital market integration. Chart 3 plots this correlation coefficient over the same 140-year period shown in Chart 1. Broadly-speaking, the two series track one another fairly closely. But Chart 3 now allows us to say things about the absolute degree of capital market integration. And what a rollercoaster ride it has been. During the first period, from around 1880 up until the Great Depression, global financial integration sat roughly mid-way between its outer limits. Integration was high-ish, but far from perfect. For around a fifty year period, from the 1930s through to the 1980s, global finance then went into hibernation.