According to study commissioned by Asian Development Bank, the global financial crisis slashed the value of financial assets worldwide by USD 50 trillion in 2008.
The study said that financial asset losses in developing Asia, which suffered more than other emerging markets, totaled USD 9.6 trillion or just over one year's worth of developing Asia's gross domestic product.
The ADB sponsored study said that "The previous sense of strength and invulnerability is now gone, there were concerns about the effect of a shallow recession in the United States, but the general perception was that Asia, the largest regional emerging market group was doing well."
The study said that "The loss of financial wealth is enormous, global Financial Turmoil and Emerging Market Economies, Major Contagion and a shocking loss of wealth. As noted earlier, the loss of wealth at a world wide level may amount to an astounding USD 50 trillion or one year's worth of GDP. Such losses will have an enormous impact on domestic expenditure."
Mr Haruhiko Kuroda President of ADB said Asia was hit harder than other parts of the developing world because its markets have expanded more rapidly.
The study said the ratio of financial assets to GDP rose to 370% of GDP in developing Asia in 2007 from 250% in 2003.
Based on the study, the estimates measure the losses in equity and bond markets, including those based on mortgages and other assets, and the depreciations of currencies against the US dollar. The estimates did not include financial derivatives such as credit default swaps that further multiplied the size of the financial markets.
The study added however, the data provides clear proof of the close connections between the markets and economies around the world, leaving few, if any, countries immune to financial or economic fallouts elsewhere.
Mr Kuroda at the opening of the 2 day forum on the impact of global economic and financial crisis at the ADB headquarters in Manila said that "This is by far the most serious crisis to hit the world economy since the Great Depression."
(Sourced from Reuters)
