OPINION: Developing economies increasingly vulnerable in unstable global financial system
In this column, Yilmaz Akyuz, chief economist at the South Centre in Geneva, argues that emerging and developing economies have become more closely integrated into an inherently unstable international financial system and will probably face strong destabilising pressures in the years ahead.
– After a series of crises with severe economic and social consequences in the 1990s and early 2000s, emerging and developing economies have become even more closely integrated into what is widely recognised as an inherently unstable international financial system.
Both policies in these countries and a highly accommodating global financial environment have played a role. Not only have their traditional cross-border linkages been deepened and external balance sheets expanded rapidly, but also foreign presence in their domestic credit, bond, equity and property markets has reached unprecedented levels.
New channels have thus emerged for the transmission of financial shocks from global boom-bust cycles.
Read more at: Inter Press Service