- listings of stocks and more cross - border ownership and control of exchanges, banks, and securities settlement systems. outside of the united states, in 1997, 15 percent of the assets in private equity portfolios were in foreign equities. a decade later, this share has risen to 24 percent. for u. s. investors, the comparable shares grew from 9 percent of total equity portfolios to 19 percent. bond portfolios have also become more international, especially for foreign investors. while financial integration has occurred globally, this growth has been uneven. integration among industrialized countries, measured by the ratio of the sum of their foreign assets and liabilities to gdp, has tripled since 1990, while an analogous measure for emerging and developing economies has increased only about 50 percent. 5 one result of this financial integration is that the financial channels are growing in importance in the transmission of shocks between economies. 6 the extent of this integration has become painfully evident to investors and financial institutions during the current episode of financial turmoil, with the collapse of the subprime mortgage market in the united states spreading losses and funding pressures to many corners of the globe. recent analysis of the size and sources of spillovers between the united states, the euro area, japan, and other industrial countries finds a central role for international trade. but data from 1986 compared with 2007 ( international monetary fund, 1986 - 2007 ). hummels ( forthcoming ). federal reserve bank of atlanta ( 2008 ) ; also see the world bank ( 2005 ). lane and milesi - ferretti ( 2007 ). imbs ( 2004 ) shows that financial integration raises business - cycle synchronization among a sample of industrialized countries, even though financial integration leads countries to be more specialized. spillovers also occur through commodity prices and through financial variables such as shortand long - term interest rates and equity prices. 7 for example, when liquidity conditions tighten in one country, globally active banks may attempt to pull liquidity from overseas affiliates, reducing the liquidity consequences at home but simultaneously transmitting the shock abroad. 8 what is particularly interesting is that in some cases, financial linkages might now be more important for transmission than the traditional trade linkages. decoupling during the recent u. s. slowdown i turn now to evidence regarding decoupling during the recent u. s. slowdown. part of the reason the hypothesis of decoupling has gained so much traction is that the economies of the world had appeared particularly "

that in the euro area as a whole, while that of older females does not adjust upwards easily, as these tend to have fewer skills and experience or have to care for dependants. longer hours are probably not compatible with a better quality of life. technology upgrades through, for example, automation and artificial page | 5 intelligence offer a promising avenue, but can be very costly for small firms and also require skills and financing that are not immediately available. their effectiveness rests on a more active participation in training and re - skilling programmes as well as entrepreneurial willingness to support innovative activities. the private sector is likely to maintain a high dependence on foreign workers. the latter, however, tend to stay for a relatively short period in malta, which does not augur well for firms ’ return on investment in human capital and productivity. it may also put at risk the competitiveness of our exports and job prospects to the extent that wages begin to increase faster than productivity. from this point of view, there is an urgent need to understand the factors behind the relatively short stay of foreign workers in malta and devise solutions to this problem. a key factor that has been cited by firms and foreign workers alike is the recent rapid increase in rent in the private market, but there may be other reasons. the recently published white paper on rent reform puts forward a number of proposals that should enable a better - informed assessment of the rental market in malta and which seek to offer greater certainty and protection to landlords and tenants. with the public consultation on this subject now completed, we now look forward to the implementation of the proposed measures. permit me at this point to note that the central bank is itself an employer of specialist foreign staff, thus we also speak on the basis of a direct feel for some of the problems they face. apart from the already mentioned rents issue, there are other apparently minor but certainly unhelpful matters, ranging from the difficulty of finding school places, opening a bank account and the time consuming effort to get an id card. while home ownership in malta remains among the highest in the eu, it is also evident that the changing fabric of society and economic factors are pushing some segments of the population to resort to the rental market. the continued rise in house prices reinforces this pattern. according to eurostat, house prices rose at an annual rate of 5. 6 % in the first half of this year, following a 5. 3 % increase last year. the deflated measure has also picked up in