Policy responses appear uncoordinated between regions, addressing some immediate problems but also fuelling imbalances and exposing policy contradictions elsewhere. Looking at the mix of slowing growth and high private-sector leverage in emerging Asia, in particular China, some observers wonder whether the world may face a repeat of the 1997–98 Asian crisis.
Such concerns may prove excessive: in contrast to 1997, Asian sovereigns are financially more solid, with stronger reserve buffers and – a point I will return to later – more flexible exchange rates, which have limited the build-up of external  1  International Monetary Fund, “Where are we headed? Perspectives on potential output”, World Economic Outlook, Washington DC: International Monetary Fund, April 2015.