The Global Financial Crisis of 2008–2009: Implications for Emerging Asia

Abstract

The onset of the crisis in the US and Western Europe initially had only marginal impacts on emerging Asia. In the first instance there was an increase in gross outflows from Asian investors in 2008, as the initial response of some Asian investors – especially sovereign wealth funds (SWFs) – was to invest aggressively in selected US and European financial and related assets, believing them to be grossly under-priced. However, as the crisis intensified, and with the prospect of being faced with significant capital losses with the collapse of major financial institutions and overall asset prices in the developed world, these gross outflows from Asia probably tapered off, if they were not reversed completely.