the sub-prime paper and its structured products which are a small proportion of financial assets) or small financial institutions cannot be underestimated as they can threaten and destabilize financial systems and – given the cross border exposures – can create unexpected turbulence for global financial markets and economy. 27. This dispels any notions of a decoupling from the US economy.
The size and scale of interaction between Asia and the US brings immeasurable benefits when the going is good, but it will also bring a measure of misery when the economy is in trouble.