London - AFP
The eurozone debt crisis has impacted emerging markets, especially in eastern Europe, as risk-averse investors have repatriated funds, the Bank for International Settlements (BIS) said Sunday. Investors withdrew more than $25 billion (18.7 billion euros) from emerging market funds in August and September, the Basel-based BIS said in a study. Share prices in emerging markets had also fallen sharply in September, said the researchers, who added that \"this suggests that risky assets were sold to reduce portfolio volatility\". The fund repatriation from emerging economies coincided with inflows of $85 billion into the eurozone -- the result of asset reductions outside the European monetary union that have largely flown to France. This downward trend worries analysts because \"\"any reduction in euro area bank lending to firms and households in emerging markets could exacerbate slowdowns in economic growth,\" said the report. Among the countries hardest-hit by risk aversion were central and eastern European countries, it said. Major banks -- including Germany\'s Commerzbank, hit by the Greek debt crisis, and Italy\'s Unicredit, which took a third-quarter net loss of 10.6 billion euros -- have said they will reduce new credits to the region. Austria has also imposed greater discipline on its banks, which have been major lenders to Croatia, the Czech Republic, Hungary and Romania. Investors have sought to place their assets in safe-havens such as the bond markets in the United States, Canada, Australia and some northern European countries and in investments in Japan.