Globalization in retreat — capital flows decline since crisis: The volume of cross-border capital flows has fallen sharply, but that may not be a bad thing, says Shawn Donnan in the Financial Times. Capital flows have dropped to USD 4.3 tn in 2016, down to a third of the USD 12.4 tn in 2007. Leading the retreat are European banks which have significantly reduced cross-border lending. Donnan argues that the move has made global finance much more stable, especially considering how it was ease of cross border lending that was a driving force behind the housing bubble and the subsequent financial crisis. Another important side effect from this decline appears to be the shift among investors towards relying on foreign direct investment in long-term projects across the globe. This may not altogether be positive, says Donnan, as the move is driving countries to compete for FDI by lowering taxes.