conditions tighten. Although banking soundness in Asia has
improved, banks in some countries have experienced rapid
growth of credit to households, and close supervision is
called for. Asia has also benefited from the run-up in
emerging market equity prices and like other regions, could
see price declines if foreign investors were to pull back
amid a rise in global risk aversion. But these risks should
generally be manageable, owing to the region's improvements
in fundamentals.
? Global current account imbalances. A disorderly unwinding
of the imbalances that would cause a sharp slowdown in U.S.
demand would have significant consequences for Asia, which
remains dependent on external demand.
Click to visit IMF website to views entire Executive Summary and Report on Asia and Pacific.
International Monetary Fund
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