Asia withstood the global financial crisis relatively well. This was partly because leverage in Asia’s private and public sectors prior to the crisis was relatively low and thus the region was able to avoid the drastic balance sheet adjustment experienced by the countries in the epicenter of the crisis. With the unprecedented loosening of financial conditions in advanced markets, leverage in many emerging markets, including in Asia, has risen significantly in recent years.

In this conference, we ask if these developments could be a ‘mixed blessing’, which could potentially put Asia in a more vulnerable position than otherwise. The conference takes stock of where Asia stands in the present credit cycle, explores new risks emerging from this leverage cycle, and considers potential policy responses.