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See October 2009 GFSR for a discussion of the measures undertaken by central banks and their impact on markets.
This is broadly consistent with the level of expected default frequency calculated by Moody’s KMV for Hong Kong SAR as at early September.
The small size of Hong Kong SAR relative to other blocks prevents us from considering it alone as a separate block in the model. While this treatment may understate somewhat the strong trade linkages between Hong Kong SAR and the Mainland China (which are stronger than the trade linkages between the other economies in the EMEAP6 block and Mainland China), the assumption will not change qualitatively the results given the the nature of the shocks considered here and the composition of the stimulus in China (which is mostly made of public infrastructure spending).