Abstract
First paragraphDuring the recent decades the financial sectors of developed and developing countries as well as global financial relations have changed remarkably. The overall importance of financial factors for real investment and growth of non-financial business has risen, as has the financial activity of non-financial corporations. Power relations between shareholders in joint stock companies, management, and labourers seem to have changed. The development of new financial instruments, together with the booms in stock market and real estate prices, has increased the potential for wealth-based and debt-financed consumption. As a result of these developments financial fragility (Minsky 1977) has increased. The current financial turbulences, generated by the sub-prime mortgage crisis in the USA and spreading over international financial markets since summer 2007, may be seen as a result of this increased fragility. Finally, global financial relations and conditions have changed with the rapid development in Asia and the associated current account surpluses, in particular in China but also in Japan.
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