Emerging market economies (EMEs) avoided full-blown crises during the recent global tightening cycle and bank failures despite liquidity strains, Bank for International Settlements research finds.

The paper compares stresses in 2022 and 2023 with two past episodes – the 2013 ‘taper tantrum’ and the 2020 ‘dash for cash’. Authors Mathias Drehmann, Bafundi Maronoti and Angela O’Connor note a shift in the pattern of vulnerabilities.

Previously, EMEs were most vulnerable due to short-term, unhedged