S&P: Romania very vulnerable to subprime crisis

In the S&P report, entitled “Why the Global Credit Squeeze could Hit European Emerging Market Sovereigns Harder than Others,” the agency’s specialists explain why they “believe Eastern European sovereigns are the most exposed, while Asian and Latin American sovereigns, with their trade surpluses and large foreign exchange reserves, are generally better insulated against the dearth of financial flows that may be in store if the global economy declines more sharply.”

However, Standard&Poor’s indicated that the level of vulnerability of each state depends on its dependence on foreign capital inflows to finance external imbalances and avert balance-of-payments crises. (The Money Channel)