The financial vulnerability of emerging market economies has decreased dramatically in the past four years, and the trend is not temporary, an International Monetary Fund official said at the April launch of the institution's Global Financial Stability Report. Emerging market economies have their macro-economic fundamentals on the right track, the IMF says, but risks still exist.
For fIrms, there is one note of caution: the increase in corporate borrowing might lead some to find themselves in trouble if profits fall short of expectations.
More on emerging market financing flows in the appendix of the Report's first chapter. Credit markets and emerging sovereign debt are discussed in chapters II and III, respectively.
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