Money market conditions in Europe, however, remain a little more strained, probably partly due to the fact that a significant amount of the structured investment products were in fact purchased by European and other overseas investors. Up until the end of October, financial markets recovered, with equity markets in particular bouncing back to levels higher than at the time of the turmoil.
However, experience has taught us that financial market gains could easily be reversed in times of uncertainty. Emerging markets could still feel the impact of an abrupt and sustained change in global financial conditions and international investor appetite for risk.