Policy makers should be vigilant to potential volatility in currency markets and ensure that appropriate countercyclical adjustment mechanisms are available.
National authorities and international financial institutions should work together to enhance the framework for measuring institutional quality.
The COVID-19 pandemic has accelerated digital technology adoption in the financial sector and impacted the role of financial technology firms in supporting households and businesses.
Excessive risk-taking by nonbanks could lead to systemic risk vulnerabilities in economic downturns.
Digital transformation can raise the productive capacities of economies in Asia, helping to enhance trade, financial inclusion, and firm competitiveness.
Emerging Asian economies are overall more susceptible to monetary policy shocks emanating from the People's Republic of China than those from the United States.
Greater development of local currency bond markets helps to mitigate against capital flow volatility, while foreign investor participation has the opposite effect.
Feed-in-tariffs have the greatest overall effect in Asia on driving private investment in renewable energy.
Greater climate vulnerability appears to have a sizable positive effect on sovereign bond yields, while greater resilience to climate change has an offsetting effect.
Vulnerability to the direct effects of climate change matter more than climate risk resilience in the implications for sovereign borrowing costs.
COVID-19 economic recovery can be advanced by greater efforts to boost longer-term resilience and sustainability in Asia and the Pacific.
Policy makers need to be aware of the increasing prominence of the digital economy and digital finance and seek to better understand how continued digitalization will affect policies aimed at managing the economy.
Governments must climate-proof their economies and public finances or potentially face an ever-worsening spiral of climate vulnerability and unsustainable debt burdens.
Climate Change and Sovereign Risk describes how climate change could significantly impact sovereign risk and fiscal sustainability in Southeast Asia and other highly climate vulnerable areas and offers policy recommendations.