Hidden Danger Behind Financial Crisis in Emerging Markets

Abstract

Under the circumstance of financial integration, the spillover effect of financial crisis has gradually evolved from regions to worldwide. Plus, the outbreak of Covid-19 has accelerated the social and economic polarization. In general risk management research, countries with high debt defaulting risk were more likely to be attacked by financial crisis among emerging markets. Taking Argentina and Turkey as examples, this paper uncovered that sovereign currency strength is the original cause that drives emerging markets frequently exposed to financial risk. Accordingly the author puts forward suggestions to contain the risks in post epidemic era.