Has global finance reached its peak?

THE slight uptick in global export growth in recent times has helped alleviate some of the fears that the world economy is entering a prolonged phase of trade deglobalisation. Forward looking indicators such as the WTO's World Trade Outlook Indicator are suggestive of stronger trade growth in the first half of 2017. However, it may be too soon to pass a definitive judgement as global trade-to-GDP ratios have remained flat since 2008 after decades of steady growth, and many global trade and growth policy uncertainties persist.

Major trading hubs like Singapore have a keen interest in ensuring that international trade flows become buoyant again on a sustained basis. Singapore Prime Minister Lee Hsien Loong's urging of G-20 leaders in Hamburg to refocus attention on multilateral trade while ensuring a more even and durable spread of its benefits is timely amid a seemingly more mercantilist approach to trade being taken by the US and some other countries.

The Republic, being a major financial centre as well as an exporter of capital, must also be aware of the other potentially worrying trend, namely peak finance. Has global finance reached its peak and are we now witnessing a secular period of financial deglobalisation?