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China Banking Crisis Warning Signal Still Flashing, BIS Says

  • Canada and Hong Kong also seen at risk from high indebtedness
  • Still, China’s deleveraging campaign is easing credit levels
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University of California’s Shih discusses China’s deleveraging efforts and the possibility of a banking crisis.(Source: Bloomberg)
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China, Canada and Hong Kong are among the economies most at risk of a banking crisis, according to early-warning indicators compiled by the Bank for International Settlements.

Canada -- whose economy grew last year at the fastest pace since 2011 -- was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy. Household borrowing is also seen as a risk factor for China and Hong Kong, according to the study.