Claudia Calich: Emerging markets can withstand the ongoing crisis as long as the crisis remains concentrated on the smaller economies. The economic impact of the peripheral European economies on emerging markets is small, because of their relatively small size. As such, emerging market exports to those economies are small, as well the size of their investment flows into emerging markets. Emerging market banks do not have direct exposure to European periphery debt, which protects their balance sheets. However, should a large European country require financial assistance or should the economic growth of the core countries be negatively impacted as a result of the developments in the periphery, the impact on emerging markets will increase.
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