Capital flows will return to Asia once credit crunch ends: ADB

0 Comments | AFP, May, 2008

MADRID (AFP) — Once the global credit crunch eases Asia will see the return of the large capital inflows which put the squeeze on their economies, a senior Asian Development Bank (ADB) official said Saturday.

"We can expect massive capital inflows into Asia once financial stability is restored," Masahiro Kawai, the bank's head of regional economic integration, said at a the ADB's annual meeting in the Spanish capital Madrid.

Global financial markets were still in the middle of the credit crunch that emerged from the US subprime crisis but confidence will be restored in six to 12 months, he said.

"And then where will they invest? Maybe not in the US because we expect the US economy to continue to stagnate for several quarters...it will be in Asia," said...