Quick-fire reforms won’t prevent renewed taper-turbulence

Suggestions that policymakers in troubled emerging markets (EM) now have a window of opportunity to reduce external vulnerabilities before the Fed begins to taper miss the point that these countries’ problems are largely structural. The reforms required to rein in current account deficits will not be easy to enact and will take a long time to have any impact. Accordingly, EMs such as Brazil, India and Turkey will remain exposed to financial market turbulence.