The Global Crisis and Financial Intermediation in Emerging Market Economies

Emerging market economies (EMEs) were significantly affected by the global financial crisis. Nevertheless, compared with their experience in previous crises, EMEs displayed remarkable resilience, maintaining robust rates of growth even as the crisis unfolded in advanced economies starting around mid-2007, and containing disruptions to financial markets so as to avoid experiencing crises themselves. The peak period of stress in EME financial markets was also Comparatively limited, with severe pressures in the aftermath of the Lehman Brothers bankruptcy in mid-September 2008, and improved stability and signs of recovery starting around the second quarter of 2009. Since then, EMEs have outperformed advanced economies, both in terms of economic growth and in asset price valuations.