CHAPTER I INTRODUCTION
Author:
Mr. Donald J Mathieson
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and
Mr. Garry J. Schinasi
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Language:
English
Print Publication Date:
22 Aug 2001
Keywords:
WEFS; market; market participant; yield; bank; asset; market perception; market condition; emerging market equities; International capital markets

Abstract

During the year ending May 2001, the global economic slowdown and greater synchronization between economic and financial cycles gave rise to reappraisals of financial risk, portfolio rebalancing, and asset repricing in a wide range of financial markets. As discussed in previous International Capital Markets reports, past financial market adjustments, such as that which occurred in 1998, often seemed to have originated in concerns that excessive leverage, market illiquidity, and other potential financial fragilities could engender real economic consequences such as a “credit crunch.” By contrast—and contrary to concerns expressed by market participants last year that the U.S. and global economies might experience overheating—the recent adjustment reflected perceptions, and then the reality, of deteriorating economic conditions and prospects. Concerns later arose that the attendant financial repercussions, including downward pressure on corporate earnings growth and rising default rates, would adversely affect prospects for real economic growth.

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Cover International Capital Markets, August 2001
International Capital Markets, August 2001
ISBN:
9781589060562
ISSN:
0258-7440
Publication Date:
22 Aug 2001
Publisher:
International Monetary Fund
DOI:
https://doi.org/10.5089/9781589060562.083
Pages:
244

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