Highlights of the month • Despite increased optimism that a recovery is taking hold, we see a growing risk that the US recovery will look like a flash of lightning – a bolt out of the blue driven by short-term stimulus and restocking. Even in Asia, where the recovery is stronger, sustainability is still undermined by weak loan demand and poor infrastructure in many economies. • At the IMF annual meeting taking place this week in Istanbul, we sense a possible tidal wave of controls and regulations. Such controls, especially those driven by a political agenda, may stifle banking and finance in the years to come. • Another risk is the volcanic eruption brewing under the dollar. Fearful of a future crisis, many countries are keen to build currency reserves. Meanwhile, mindful of the fault lines beneath the dollar exposed by the crisis, they are also keen to diversify away from the dollar. But there are not many alternatives – a dilemma that creates instability in the currency world. • Challenges abound, but fundamentals will still make a difference. In China, growth momentum is spreading, especially westward. In India, growth appears to be understated by misleading trade statistics. Even in Taiwan, growth prospects seem to be improving, despite damage from typhoon Morakot. Upside surprises are also expected in Saudi Arabia and the UAE after their first recessions in a decade.