While the picture is a mixed one and some markets show signs of froth, indicators of financial stability do not seem to show widespread imbalances.11 For example, EME equity prices, shown in chart 5, plunged during the global financial crisis, rebounded thereafter, but then generally flattened out or even declined.
There are exceptions, of course, such as Indonesia, whose stock market soared until earlier this year. But in aggregate, EME stock prices remain below their pre-crisis peak, whereas the S&P 500 is well above its own pre-crisis peak. Chart 6 portrays the rise in credit to the domestic nonfinancial private sector as a share of GDP from its pre-crisis level.