Asian developing economies have current account surpluses instead of deficits and are less reliant on short-term foreign borrowing. But unfinished business remains – specifically a failure to deal  1  The data on direct investment are from the IMF's Balance of Payments database and cover about 80 percent of the world.
It has been demonstrated that liberal and unsubstantiated valuation assumptions can result in material inaccuracies in financial statements and substantial write-downs of structured products, and in case of excessive concentration, even demise of the sponsoring institution. Supervisors and banks, therefore, need to understand the potentially significant effect that market volatility on the financials of a bank.