Emerging markets (EM) have been regarded as a high risk, and predominantly risk-on asset class, when the Covid crisis occurred in Q1, 2020[1]. Fears centred on the risks of deep contagion across the asset class, characteristic of previous crises in the late-1990s, and during the GFC, should cross-border capital flows collapse, after Lockdowns and extreme risk aversion.
The Emerging Market Crisis That Never Was
Emerging markets (EM) have been regarded as a high risk, and predominantly risk-on asset class, when the Covid crisis occurred in Q1, 2020[1]. Fears centred on the risks of deep contagion across the asset class, characteristic of previous crises in the late-1990s, and during the GFC, should cross-border capital flows collapse, after Lockdowns and extreme risk aversion.