Excessive risk-taking by nonbanks could lead to systemic risk vulnerabilities in economic downturns.
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.
Underdeveloped capital markets tend to inhibit domestic resource mobilization for infrastructure investment.
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.
While the ultimate resolution of COVID-19 may lead to a market correction as uncertainty declines, there may be some permanent effects on financial markets and capital flows.
There are multiple ways by which central banks and monetary authorities can actively address climate-related financial risks and support the scaling up of sustainable finance.
Current account surplus shocks emanating from the People's Republic of China, Japan, and Germany have strong positive effects on regional growth.
Progressive integration of clearly defined environmental, social, and governance factors through regulatory measures offers economic benefits.