In addition, additional forward looking measures of risk must be applied when we see rapid growth in new products or markets, which have not been subject to an economic or financial market downturn. Firms must develop the governance and infrastructure to carry out rigorous stress tests that identify where the major vulnerabilities and firm-wide concentrations lie.
It is interesting that, just a few years ago, strong countercyclical policy actions of the type taken by Korea would not have been recommended for an emerging market country during a period of crisis, and might not even have been feasible.