ANVF 2023: Financial stability: The recent turmoil and lessons for Asia

As the world emerges from the pandemic, financial markets remain volatile. Countries adopted different strategies in response during the pandemic, leading to significant divergence in policy exits and recovery progress. In developed countries such as the US and Europe, rapid interest rate hikes to tackle inflation have exposed weaknesses in some banks' risk management, leading to a liquidity crisis. Emerging markets, on the other hand, face challenges such as weakened external demand, capital outflows, and market volatility. Strengthening macroprudential and financial regulatory oversight has become a consensus. What lessons can Asian economies draw from this? What adjustments should they make to address potential risks?