Pockets of vulnerability in major EMs

Financial risks across the major EMs look relatively well contained for the time being but there are some areas of weakness. Most immediately, following President Erdogan’s election victory the prospect of continued unorthodox policymaking in Turkey leaves the lira in line for further sharp falls. And though not on the same scale, Colombia and Romania also look exposed to weaker risk appetite. Otherwise, banking sector vulnerabilities lurk in Poland, India, Korea and Vietnam.