Usually, a sudden stop in capital inflows sparks a currency crash, sometimes a banking crisis, and quite often a sovereign default. Why, then, has the worldwide incidence of sovereign defaults in emerging markets risen only modestly?
Perhaps the change is structural. But a more cautious interpretation of the missing defaults is that the protracted nature of the downturn in international conditions has yet to take its cumulative toll, or that lingering weaknesses will only become evident once the major central banks move further along in renormalizing their policy stances.
Source: 'The Curious Case Of The Missing Defaults' - Carmen Reinhart Fears What Happens Next