This is clearly evident in economic indicators on capital movements and foreign direct investments, international trade, technology transfers, and the expansion of cross-border activity of multinational firms. Thus, global considerations are always on the radar screen of policymakers, especially those in small open economies like South Africa.
This trend is explained, not least, by increased leverage in the corporate sector, particularly in emerging market economies. Complacency with regard to the resilience of the financial system is thus a risk, and assessment of debt sustainability might be overly positive. Moreover, measuring risks and the associated losses when these risks materialize is difficult.