Asian financial markets and regulators have to be wary of speculators and traders that will invariably be promoting a range of high risk financial products. Supervisory bodies must fully understand and meticulously examine the extremely technical financial products that they regulate. 29.
Liquidity operations and excessive lowering of policy rates, while easing short term constraints, inducing financial stability, and reviving US and other economies, do however pose the attendant risk of inducing global inflationary pressures. The associated bail out of investors presents a “moral hazard”.