The effect of that decision to wait rather than invest is clear in surveys of manufacturing businesses right round the world, which have fallen to low levels over the course of the past twelve months as the dispute has intensified (Graph 1). It is particularly apparent in east Asia, most obviously South Korea, as well as places like Germany.
Precisely because of the opacity of bank balance sheets and their internal risk models, we do not yet fully understand the reasons for these disparities. Some observers have suggested that U.S. stringency in application of the rules and standards may be a factor.