Additionally; the recent surge in equity markets has created concerns about under-pricing of risks with attendant implications for financial stability. Any abrupt correction of such risks may result in sharp fall in asset prices and enhanced volatility in global financial markets, especially in the EMDEs.
Is the European response to the crisis killing growth? Is the ECB’s response to the crisis swamping the world with liquidity? Is the worst of the crisis over? Policy-makers are often asked if the worst of the crisis is over. It is a difficult question to answer. If we are optimistic we are accused of cheerleading.