This high loss level reflects the rapidity with which loan quality has deteriorated during the crisis and suggests that banking organizations may need to continue their high level of loan loss provisioning for some time.
Consequently, domestic asset prices are increasingly determined by global factors. For instance, the question of to what extent the investment of China's current account surplus has reduced long term interest rates in advanced economies, most notably in the US, has been studied extensively in recent years. The results are not clear-cut but it seems that the impact has been substantial.