Failure of Cyprus bailout talks and a collapse of the nation's banking system could have ramifications for developing nations if a major market selloff ensues, said World Bank Managing Director Sri Mulyani Indrawati. "The first impact on this global environment from this Europe situation comes from perception because it is psychological. And that is contagious because it is coming from the capital market, from the equity market, from the financial sector," Indrawati said in Beijing.

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