However, in the present day, Central Bankers and other policymakers around the world are confronted with a number of challenges in maintaining financial system stability due to the high contagion effect resulting from the increased complexity and connectivity in this hyper-connected world. Although globalisation can allocate savings and investments more efficiently worldwide than in the past and the net benefit of financial globalisation for developing countries can be large, the financial crises the world encountered over the last 80 years, ranging from Wall Street Crisis during 1929–33 to Subprime Crisis in 2008–09, have shown us how large, costly and disastrous the spillover effects could be and how they have made the financial system deteriorate while spreading fast to other economies. Recently, US Fed Chairperson Janet Yellen said, I quote, “No economy is immune from financial instability and the adverse effects on employment, economic activity, and price stability that financial crises cause”. However, since there is no universally governed law or standard for defining or measuring financial system stability, we have to understand our own circumstances and find tailor made solutions that are appropriate for us to sustain the stability in the financial system. The main benefit of financial globalisation for developing countries is the improvement of their financial system through positive spillover effects from more complete and stable, deeper and better-regulated financial markets. A smooth functioning deep financial system with capital buffers and an effective level of credit expansion and risk mitigation capacities are crucial for developing nations as they foster economic growth.

Ravi Menon: Monetary Authority of Singapore's Annual Report 2017/18 Remarks by Mr Ravi Menon, Managing Director of the Monetary Authority of Singapore, at MAS' Annual Report 2017/18 Media Conference, Singapore, 4 July 2018. * * * Good morning. Welcome to MAS’ Annual Report media conference. GLOBAL ECONOMY Let me begin with three broad statements about the global economy. One, the current expansion in the global economy is likely to be sustained this year. Two, the global growth cycle has matured and is probably past its peak. Three, tail risks to growth have grown significantly over the last six months. The current expansion in the global economy is likely to be sustained through this year. Last year, global GDP growth was at its strongest since 2011, at 3.8%. This momentum has carried into this year and is expected to persist. The strength of the global economy is anchored on three mutually reinforcing upturns – in manufacturing, in trade, and in investment. Global manufacturing is still expanding. Industrial production rose by 3.4% in 2017 and leading indicators like new orders for capital goods remain healthy. World trade has kept pace with GDP growth. Emerging Asia in particular is experiencing healthy expansion in trade, on the back of stronger demand in the G3 economies. Investment growth has picked up. Business capital expenditure in the G3 and Asia increased by 3.6% in 2017. Capex spending in the US is expected to be sustained, on the back of corporate tax cuts, deregulation, and positive business sentiment.