Probability of financial crisis high

Korea has been dubbed the next most likely candidate for financial crisis next to India. The world¡¯s most renowned investment bank, Goldman Sachs, revealed on its report of the international treasury market that Korea recorded 11.7% points on its GS-Watch, a warning model for financial crisis, 5% points higher than the Asian average. In the report, Goldman Sachs stated that Korea has been maintaining the percentage points well below the Asian average, but with the recent instability in the financial markets, the percentage points sharply increased. Korea is currently next to India with the most probability for an outbreak of financial crisis. The Bank of Korea rebutted by saying that GS-Watch can¡¯t be fully trusted. It pointed out that one of the measures for the model is political risk, and it rates the risk of Korea higher than that of Indonesia, whereas other reports rate the risk of Indonesia higher than Korea.