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here becomes a considerable increase in capital requirements especially when new rules are applied to financial markets with high-risk parameters, such as emerging markets are. The increased cost due to higher capital requirements could be a disincentive to investment in markets with higher risk profiles than the developed markets, taking also into account that diversification benefits deriving from investing in emerging economies have shown a decrease over time. The reduction of institutional investors can thus represent a brake on the process of innovation and evolution of emerging markets.
In your initial post, please discuss an example of one risk that countries or companies in emerging markets face today. Describe the impact this risk has on the micro- and macro-economies of an emerging market. For example, one such risk is that of pandemics and other health crises (fast-traveling pathogens such as COVID-19, or other developing world disease such as HIV/AIDS), which could jeopardize supply chain operations, consumers, employees, and others.
Respond substantively to at least two other students posts. Please describe what strategy you would recommend to address and mitigate the risk mentioned in your peer’s original post.
For example, a collaborative mitigation strategy could provide improved information resulting from improved dialogue and data analysis around the risk issue, producing benefits such as improved mechanisms for identification, mitigation, and monitoring.
*please remember to include at least one credible scholarly reference with your initial post!