The financial market turmoil of the late summer may be a fading memory, as stock markets hit new highs and borrowers regain access to credit markets, but the imbalances they exposed continue to loom large over global economic prospects. What was highlighted by that turmoil was not simply the fragile state of the sub-prime mortgage market in the United States but a steep build up of debt by United States households, which has been allowed to continue for far too long. With house and stock prices rising at a record pace, debt-led consumer demand in the United States and export-led growth in much of the rest of the world have combined to give a fast pace of overall global growth, but this has been accompanied by large and persistent current account deficits (United States) and surpluses (Japan, oil exporters and parts of emerging Asia). Such has, in essence, been the configuration of global macro-financial imbalances. Talk of an "end of business cycles", the "goldilocks economy" and overall "sound fundamentals" convinced lenders, borrowers and policy-makers that there was little danger of a sudden reversal of rising asset prices and the possible danger of a disruptive unwinding of the global imbalances.