In addition, if financial institutions take excessive risks under the severe profit environment in order to acquire immediate profits, the vulnerability of the financial system could increase in the longer term. These risks are judged as not significant at this point, mainly because financial institutions have sufficient capital bases.
But these are early days, and risks of further outbreaks of the virus remain. Moreover, near-term prospects for East Asia are dependent on the rest of the world, where much activity has yet to resume. Building the bridge to recovery Policy-makers around the world have responded to the extraordinary challenges created by this crisis.