Why tapering doesn’t mean QE is going away

Leslie Shaffer
IIF: The 'Septaper' impact on asset pricing

The Federal Reserve may be preparing to taper its bond buying program, but the rest of the developed world is ready to compensate, said Tim Adams, president and CEO of the Institute of International Finance and former Under Secretary for International Affairs at the U.S. Department of the Treasury.

"It's not just about the Fed," Adams told CNBC, noting the European Central Bank, the Bank of England and the Bank of Japan have all given forward guidance of further asset buying. "It's not as if you've got the developed world all receding at the same time," he noted, adding the BOJ is in "for the long haul."

(Read more: Here's what may trigger more BOJ stimulus)

The Fed is currently buying around $85 billion worth of assets a month, while the BOJ pledged in April to pump $1.4 trillion into the Japanese economy over the following two years, marking the world's most aggressive quantitative easing program. The BOE has an around $574 billion quantitative easing program. The ECB hasn't yet started its bond buying, pending a court ruling on whether it is constitutional.

(Read more: Jobs data good enough for tapering, just 'taper light')

Overall, tapering expectations, which have boosted interest rates, may signal positive developments, he said. "Bonds are telling us growth is coming back," he said. "We certainly see it in the U.S.," although the pace of improvement is a bit slow.

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However, tapering "does mean assets are going to be re-priced. And for those who haven't prepared for that, it could be a volatile time," he said. "Those countries relying on imported capital are going to face stress," he added, noting markets clearly view India as the most vulnerable.

India's Sensex stock index is down around 6 percent from its mid-May peak, while its currency has shed over 20 percent of its value this year.

Others also note the markets' "taper tantrum" may be a bit overdone.

(Read more: Goldman's Hatzius: Fed will taper, but it will 'lean' dovish)

"In Asia, every economy has been battered by the recent turmoil," Frederic Neumann, co-head of Asian economics research at HSBC, said in a note. "Some markets were treated overly harshly," he said.

"The Fed will continue to print money for a while" as will Japan, he noted. "China is no longer sliding, the global industrial cycle is ticking up, and, really, how high can rates go with the Fed printing money?"

To be sure, emerging Asia's deteriorating competitiveness means it will likely get less of a customary lift from the developed market improvement, Neumann said.

(Read more: Fed can't afford to ignore emerging markets: Lagarde)

"But this is not to say that the region will feel no lift at all - at least it should help put a floor under growth," he said. "Do you really expect the West to deliver growth rates beating these economies in the near future?"

Neumann expects Korea, Taiwan and the Philippines will do reasonably well in the current environment. He added, Vietnam is making steady progress and Thailand and Malaysia "aren't knocked out."

—By CNBC.Com's Leslie Shaffer; Follow her on Twitter