1. robindcmatthews.com 3 October 2015 Part 2 RANEPA lecture to students october 3 2015 robindcmatthews 1

2. NOTE In this presentation and in the two following presentations Interdependence in globalisation part 1 and part 3 I am indebted to a number of sources: Managing global finance as a system Speech given by Andrew G Haldane, Chief Economist, Bank of England At the Maxwell Fry Annual Global Finance Lecture, Birmingham University 29 October 2014 Stuck: Speech given by Andrew G Haldane, Chief Economist, Bank of England, Open University, Milton Keynes 30 June 2015 Rethinking the financial network: Andrew G Haldane* Executive Director, Financial Stability Bank of England Speech delivered at the Financial Student Association, Amsterdam April 2009 Climate change: The world is warming, Heat map 14:31 by The Economist online Nov 29th 2010. RGE Monitor; MonthlyChartbook: Pauline Argudin and the Roubini research team September 2015 And various images taken from the internet. lecture to students october 3 2015 robindcmatthews 2

3. 1 0 1 1 0.9 1 A B AB A B AB 1 1 - 0.8 1 1 1 CORRELATIONS A/B -1 ≤ CORR A/B ≤ 1 lecture to students october 3 2015 robindcmatthews 3

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7. INCREASING CORRELATION BETWEEN SPOT PRICES OF USA, GERMAN AND UK ASSETS WITH DIFFERENT MATURITY DATES 1996 2013 0.9 0.5 lecture to students october 3 2015 robindcmatthews 7

8. Haldane (2009) lecture to students october 3 2015 robindcmatthews 8