If conditions in global financial markets deteriorate further and risk aversion becomes more entrenched, there is always a possibility that equity capital could flow out of the region reasonably quickly. But Asian equity market valuations are generally not that high, with solid corporate earnings keeping P/E ratios down despite the sharp rise in equity prices recorded in recent years.
More generally, in my judgement, structural changes and reforms to Asia’s banking and corporate sectors over the past decade leave the region in better shape than it was a decade ago to cope with any potential problems which may occur.