The US Federal Reserve's announcement of a delay to the start of a slowdown in asset purchases gives Asia's markets a bit of a reprieve but does not change the basic picture that the US is embarking on a gradual normalisation of its monetary policy.
The big question is whether that normalisation will keep driving investors out of Asia's markets, further taking the wind out of the region's economic sails and all but wrecking the most vulnerable economies, as happened in 1997 during the Asian financial crisis.
The quick answer is "no". A repeat of the 1997 crisis, when investors fled in droves and economies tanked, is not on the cards; foreign exchange reserves are healthier, currencies are more flexible, foreign debt is lower, most economies maintain current account surpluses and most nations have room for monetary and fiscal adjustment.
However, there are certainly risks ahead and markets and economies need to work now to brace themselves for a period of higher borrowing costs, some market volatility and slower economic expansion. Even before the latest market turmoil, growth was already slowing, particularly in China.
As quantitative easing begins to subside, it will be harder and more expensive for firms and governments to raise funds, especially in foreign currencies. And that will pinch a region desperate to boost investment, particularly in the infrastructure needed for growth.
Asia has a huge cache of foreign reserves but they have been invested more in foreign markets like the US than in emerging Asia. The key is how to mobilise these funds for the longer-term investments that power growth. Government stimulus spending kept the region's economies chugging along after the global economic crisis; now, the baton must be passed to the private sector.
But mobilising capital for private investment to drive growth is tricky. Since the 1997 crisis, local currency bonds have emerged as an alternative to bank financing or foreign borrowing. Although bond markets have grown dramatically - from around US$800 million to US$6.5 trillion in the past 12 years - they have a long way to go before reaching the levels required to fuel growth.
Take infrastructure. With the prominent exception of China, the region missed an opportunity to ramp up infrastructure spending during the period of ample liquidity after the global economic crisis. Now, as financing conditions become less favourable, tougher times are ahead. This is where bond financing, for example, can bridge the financing gap by attracting a new class of investors like pension funds.
But to create vibrant bond markets that offer long-term financing for infrastructure, much more needs to be done; securitisation can help manage risk and lengthen repayment deadlines, and governments and multilateral lenders can provide guarantees to boost potential bond issuance to investment grade.
To ease worries among lenders about whether projects are viable, governments can make it mandatory for infrastructure projects to provide information on key financial and performance variables. Investors need to trust issuers, the market and the project itself.
But governments can do most to mobilise finance by continuing to improve the investment climate - most visibly by building a predictable and transparent legal and regulatory environment.
Emerging Asia is not on the brink of a financial crisis. But recent market turmoil should be a warning to policymakers that the region is facing a more unpredictable future where greater efforts are required to get the financial and physical infrastructure needed to keep economies forging ahead.
Iwan J. Azis is head of the Office of Regional Economic Integration at the Asian Development Bank