The financial sector risk outlook for emerging market and developing economies (EMDEs) is largely divided along income lines, with lower-income countries facing much higher risks than higher-income countries. The good news is that an analysis of 50 EMDEs, which represent 93 percent of total bank assets in EMDEs, found that 70 percent of sample countries face low to moderate financial sector risks over the next 12 months. However, risks are high in some, mostly lower-income countries.1 In many of these countries, domestic risks are compounded by global risks related to the monetary policy and economic growth outlook in advanced economies (AEs), as well as geopolitical conflicts. […]