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21 The results are much the same. On average, the dispersion in banking returns is statistically significantly lower than for non-banks, at the 1% level, both for UK and global institutions. And, in general, we observe a compression of returns during credit booms and a dispersion in busts. There is evidence of an increase in the degree of coordination of global banks’ activities after the financial liberalisation of the 1980s. This suggests credit cycles may have become increasingly synchronous globally. To test this formally, we construct pair-wise correlations between countries’ credit cycles for two post-war sub-samples, 1945–79 and 1980–2008. We plot the cumulative distributions of these cross-country correlations in Chart 16. The same technique can be applied to correlations between countries’ medium term fluctuations in GDP (Chart 17). In each chart, a shift to the right of the cumulative distribution indicates an increase in the degree of crosscountry correlation. Chart 12 Dispersion of equity returns of US banks and top 100 US PNFCs (by market cap)  (1), (2) and (3) represent medium term credit booms. Outside of these areas represent medium term credit busts. Source: Thomson Reuters Datastream and Bank calculations. 20  Theoretical explanations have been put forward by, among others, Campbell and Cochrane (1999) and Mele (2007), who show that habits and cyclically asymmetric risk premia respectively may generate counter cyclical volatility in asset pricing models. 21  This global group of banking institutions included UK and US banks as a subset.