In addition, these financial institutions had an important role channeling funds to emerging economies in regions such as Central and Eastern Europe and in Latin America. With the outbreak of financial crises in the United States and Western Europe, these institutions suddenly scaled back their exposures to emerging economies, creating problems for these economies too.
Given the integrated nature of financial markets in the developed world, moreover, pressure on term borrowing costs for banks has been seen in many places over the past nine months, even if in a less acute way than observed in the countries at the centre of the crisis.