The recession will be prolonged into the fourth quarter due to the ongoing slackness of private consumption and investment demand, and the substantial slowing of export growth. Although the current account is likely to continue to run a surplus during the fourth quarter, its scale will be somewhat reduced.
The shadow banking system, on the other hand, has been only obliquely addressed, despite the fact that the most acute phase of the crisis was precipitated by a run on that system. Indeed, as the oversight of regulated institutions is strengthened, opportunities for arbitrage in the shadow banking system may increase.