As the year 2012 unfolds, its mainlegacy will be its game changing impact on global financialmarkets. Waning global growth along with central banks'bold monetary easing policies in advanced economies (AEs) totry to reverse it are changing market dynamics in unexpectedways, across both AEs and emerging market economies (EMEs).The combination of monetary stimulus, fiscal austerity andhesitant structural economic policy reforms in AEs,particularly in Europe, is taking the global financialsystem into increasingly uncharted territory. How theEuropean Union will address the future of the euro zone,including uncertainties over its banking sector, as well ashow the United States handles its Fiscal Cliff, will weighheavily on economic balances across all economies worldwide.This seems to be a significant point of inflection on thespeed of the rebalancing of economic relevance of AEs infavor of EMEs taking place over the last 12 years. Underthis scenario, the ability of EMEs to handle their ownfiscal, financial, and real economy weaknesses is criticallytied to their ability to weather external shocks and takeadvantage of growing global savings while searching foryield and growth opportunities.
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