This complex network of financial connections is extended through the savings and financing needs of all economic sectors, notably non-financial firms, households and the government. By reallocating savings from individuals and sectors with a surplus of funds to individuals and sectors in need of funds, the financial system plays a central role in the economy.
This outlook is subject to both upside and downside risks and to uncertainties. The risks include the pace of expansion in Asia and the prices of oil and non-energy commodities. A further risk relates to the resolution of global current account imbalances. Should these imbalances persist, the risk of a disorderly correction would grow over time.