Mongolia shaken by banking collapse

Mongolian policy makers have scrambled to minimise the fallout following the surprise collapse of the country's fifth-largest bank.

"Mongolia, once the darling of foreign investors and mining corporations, has had a large question mark looming over it over the past few years," says Thomas Hugger of fund management firm Asia Frontier Capital. Government back-tracking on profit-sharing agreements for mining projects has rattled investors and sent stocks tumbling 30% in the past year.

Still, following a business-friendly election result and new laws promising more investor protection, the outlook had been getting brighter.

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