Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

this is where the disparity between the trade-based view of the economy and global financialization becomes starkly evident. In 2007 Germany’s exporters earned a trade surplus with the United States of roughly $5 billion per month. According to calculations by economists at the Bank of International Settlements, what the European banks needed was not $5 billion, or even $10 billion. Prior to the crisis they had funded their dollar operations with c. $1 trillion in commitments from US money market funds. On top of that they had borrowed $432 billion in the interbank market, $315 billion on the foreign exchange swap markets and $386 billion in short-term funding from those monetary authorities that were managing dollar cash pools.