Regarding the third factor, expectations of the tapering of U.S. Federal Reserve securities purchases last May brought about an increase in global risk aversion, reducing the prices of many financial assets, especially those of emerging markets, which had been favored in the previous two years.
Although volatility declined by the end of 2013, partly as a result of lower uncertainty after the Fed finally did announce its decision to start reducing its asset purchases, risk aversion has returned in 2014. The recent deterioration of global market sentiment has once again translated into a flight to quality, away from emerging economies.