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The storm that threatened to engulf and unsettle banking in the US and Europe has subsided. That doesn’t mean we can breathe easily. As unexpectedly as the storm struck in March, it may arise anytime.
The banking failures in the US and the near-failure of a major bank in Europe are bound to take their toll on those economies. The world at large cannot escape unscathed either. As with monetary policy, we have to reckon with the spillover effects of banking instability in the advanced economies on the rest of the world.
We can expect credit growth to slow down
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