This is a considerable shock. The robust growth in emerging economies is a welcome source of strength for the global economy. With strong growth, however, comes the risk of overheating, followed by an abrupt correction. For investors, the exits could be crowded. These are risks that both private investors and public authorities need to manage.
All this we expect banks to do. And that is part of why it is so difficult to resolve a crisis which – to a greater or lesser extent all over Europe – has weakened both banks’ financial strength and their operational capacity to deliver satisfactorily on all of these functions. What might change in Europe?