In the main emerging countries, after the increase in risk premiums recorded last spring, there was a return to relaxed financial conditions; in mid-January 2005 the spreads stood at very low levels, reflecting the strengthening of economic activity, the good performance of exports and abundant liquidity. In general, current conditions in the international financial markets are characterized by low interest rates and risk premiums.
The large expansion of derivative products in the course of the last two years has redistributed risk towards market participants better able to absorb it. The markets are not signaling risks of instability at global level. 3.