Some markets spared from subprime

Alisa Roth Sep 12, 2007

TEXT OF STORY

Scott Jagow: There is a bit of good news this morning about the credit crunch. Emerging economies, it seems, have largely been spared. Alisa Roth explains.


Alisa Roth: Banks in Germany, the U.K. and elsewhere in the developed world are being clobbered by the ongoing subprime mess. But speaking at a meeting today, the head of the Bank for International Settlements said so far at least, emerging economies such as India and Brazil seem to have escaped.

The Bank for International Settlements is an organization that serves as a bank to central banks.

Robert Dunn is an economist at George Washington University. He says American banks probably didn’t turn to the developing world for cash:

Robert Dunn: Because the big money was in Germany and London, they probably didn’t think they were going to get that much out of India or Brazil.

That’s not to say developing nations won’t eventually feel some effect. If investors get skittish, they could pull out of emerging markets. And, says Dunn, the entire world will certainly feel it if the U.S. economy falls into a recession.

In New York, I’m Alisa Roth for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.