Global Finance Fate Entangled in Web of Emerging World, BIS Says
- Accumulation of foreign-currency denominated debt boosts risk
- Developing markets have learned lessons from prior shocks: BIS
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The world is increasingly at risk of being infected by turmoil starting in emerging economies given their rising clout in global trade and finance, according to the Bank for International Settlements.
Emerging-market non-bank borrowers that have accumulated $3.3 trillion in dollar debt are coming under strain as their economies slow and currencies weaken, the Basel-based BIS said in an annual report released Sunday. Those debts were built up during the era of cheap money that followed the 2009 financial crisis, and investors should take note now that this is drawing to a close, the BIS said.