Reassessing the risks in emerging markets

Richard Wise

Journal of Risk Management in Financial Institutions, 2017, vol. 10, issue 1, 74-77

Abstract: This short paper reassesses the risks inherent in emerging markets. By examining causes of the sharp increase in volatility across emerging credit markets, the paper concludes that a combination of idiosyncratic and systemic risks continue to present significant vulnerabilities to developing economies. While idiosyncratic risks are reasonably diversified across the emerging markets complex, a pre–emptive tightening in US monetary policy could once again trigger a correlated weakening in local currencies, erode investor confidence and induce a surge in capital outflows.

Keywords: emerging markets; volatility; monetary policy; systemic contagion; feedback loop (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:aza:rmfi00:y:2017:v:10:i:1:p:74-77

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