yesterday I argued that we shouldnt think 'savings glut' but 'portfolio glut' when framing this moment in the financial globalisation supercycle: the trillions of, mostly Global North, institutional investors searching for yield, often in emerging countries.
the 'portfolio glut' is important not just to dismantle the financial globalisation neutrality strawman rearing its head in the debate, but to think through consequences of shift to market-based finance in emerging countries 
portfolio glut creates complex trade-offs for EMs, as this @FT piece today shows: foreign investors demanding that EMs raise policy rates to provide yield, pandemic hit to local aggregate demand be damned
ft.com/content/e498a3…
ft.com/content/e498a3…
EM central banks have followed high-income countries' cb in adopting market-maker of last resort for local sovereign bonds, and have also introduced swapper of last resort to derisk local currencies.
Great innovations, but wrong price incentives for portfolio inflows
Great innovations, but wrong price incentives for portfolio inflows
