At the heart of the debate on how the 2007–09 global financial crisis spread from the United States to the rest of the world lies the global banks. Using a large sample composed of advanced and emerging economies since the 1980s Abiad and others (2013) show that the effect of financial linkages on output comovements during normal times is the opposite of the effect during crises. During tranquil periods increased financial linkages induce greater output divergence since capital is better able to move to where it is most productive. During the global financial crisis financial linkages contributed to the spread of financial stress across borders but other factors such as global panic increased uncertainty and wake-up calls that changed investors’ perceptions acted as a common shock and played a much larger role in increasing output synchronization.