Merrill Lynch International believes the region's markets have turned the corner and are becoming more attractive for funds in the United States. The investment bank's view is different from most US investors, who see only limited short-term returns in the region, according to chairman Winthrop Smith. 'Asia has moved off the critical list to a serious but stable condition,' Mr Smith said at the Asian Venture Forum. He said the level of cash held by emerging markets funds had been steadily decreasing since it reached an August high of 14 per cent. The level fell to 12 per cent in September and it dropped further last month. 'The worst of the outflows from international funds may be over,' Mr Smith said. Merrill remained bullish on Asia's long-term prospects in its present crisis because of the region's high savings rate and its industrious labour force. 'We are fully committed to the region, despite the ups and downs we will see,' Mr Smith said. He said the investment bank was also positive about the mainland's economic prospects. Among the positive signs in the mainland were the speed of its restructuring process and the authorities' willingness to shut down insolvent enterprises. South Korea and Thailand were the furthest down the path of reform in the region, Mr Smith said. Of key importance to Asia's recovery was management, he said. 'Above all, we want to find management that are open and honest . . . that don't depend on nepotism and cronyism,' he said. 'Macro indicators are not going to tell us as much as they have in the past. So value will come from searching for management that is able to deal with the new paradigm.'