London relies heavily on international finance and banking instability would strike a fresh blow to an economy already in recession.
In some emerging economies, slowing growth, together with the prospect of tighter Federal Reserve monetary policy and the increase in global bond yields that have accompanied it, have brought "market instability, rising financing costs, capital outflows and currency depreciations," the report said.
THERE is one consolation for the depressing instability of finance.
As policymakers wrestle to protect finance from its own instability, they shouldn't neglect the potential for threats from outside.
The structure of financial regulation in America still bears the mark of ideas forged in the Depression.Reform is certainly needed, yet, for all the excesses and instability of finance, a complete clampdown would be a mistake.
However, as Vuong Dinh Hue, Viet Nam's Minister of Finance, said: "Global economic instability persists.
European officials and the International Monetary Fund have indicated that they might suspend financing to Greece if political instability blocked their evaluation of the country's progress.
Although the United States cracked down on terrorist financing after the 9/11 attacks, instability in the financial system, like the Argentine debt default in 2001, continued to give banks an incentive to look the other way.
We've put too many eggs in the financial services basket, and finance, always the source of instability, is crippled with banks and building societies under-capitalised, over-extended and hung down with unsaleable debt.
The governor's office is now more than a week past the deadline for releasing an update on the state's finances; it has said the instability in the financial markets has prevented it from completing the report.
