Making these risks potentially more dangerous is the fact that central banks which previously would step in to mitigate such risks are, today, more conflicted: for example, they are focused on combatting inflation which restricts their ability to mount aggressive moves to maintain stability.
There is a growing risk that financial disruptions could hurt prospects for Southeast Asian economies.
The fragility of financial markets is seen in the outsized moves that occur in response to unexpected news such as the sharp crash and then rebound in the British pound. This fragility matters because there is a higher probability of bad news these days — whether due to the sharp rise in interest rates, geopolitical tensions, the weakening global economy or climate change.
