The declining yields on Italian government paper and the lower liquidity of these alternative instruments also strengthened the demand for money, and in particular for current account deposits. The climate of confidence that has prevailed in the markets has also been reflected in the surge in share prices, which has continued even after the outbreak of the Asian crisis.
It is therefore important to engage with less developed countries with all available means. This is first and foremost a humanitarian duty, but it is also in everyone’s interest. Developing countries are not an isolated world: many of them engage in global supply chains, and will remain an important part of the global recovery.