Restructuring work set to continue

Since the Asian crisis sovereign risk in the region has reduced dramatically as the devaluations led to export-led recovery and domestic slowdown. Countries' balance sheets turned around, with perhaps the strongest example being South Korea, whose reserves went from near zero to more than $90bn. Bond spreads narrowed as a consequence, and the recent global slowdown has not dented this macroeconomic achievement. The challenge ahead lies in the structural reforms needed to reallocate economic resources more efficiently, namely the restructuring of bank and corporate debt obligations. Indee...