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Monday, September 14, 2015

Which Emerging Markets Are At Highest Risk Of A Banking Crisis

Which Emerging Markets Are At Highest Risk Of A Banking Crisis

 

Credit growth in China, Brazil and Turkey doesn't only risk pushing a hangover in bad debt, it also signals a banking crisis is on the horizon, according to the Bank for International Settlements.

"Early warning indicators of banking stress pointed to risks arising from strong credit growth," according to the bank.

Like China, Indonesia, Singapore and Thailand also have credit to GDP ratios that exceed 10 percent and are therefore vulnerable to banking strains, the BIS report shows.

BIS separately said that the amount of international debt securities issued by emerging market non-financial companies stood at $75 billion in the first half of this year, compared with $161 billion for the whole of 2014 and $189 billion in 2013.

Borrowers continued to rely on dollar debt sales while increasing euro denominated issuance to $16 billion in the first half, equivalent to total sales in the currency in 2014.

BIS separately said that the amount of international debt securities issued by emerging market non-financial companies stood at $75 billion in the first half of this year, compared with $161 billion for the whole of 2014 and $189 billion in 2013.

Borrowers continued to rely on dollar debt sales while increasing euro denominated issuance to $16 billion in the first half, equal to total sales in the currency in 2014.

 

Over to you

What is an emerging market? If The United States Federal Reserve raises interest rates later this week (Thursday, September 17th) how will this effect emerging markets? Share your opinion and thoughts in the comments below.

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Posted By Jacquelyn McMullen @ceifx at 12:00 PM
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