, Columnist
Here’s One Reason to Worry About Emerging Markets
Companies are more leveraged than they were before the last big meltdown.
How bad could it be?
Source: Kyodo News/Kyodo News StillsThis article is for subscribers only.
Investors are getting worried about emerging markets again, and they have at least one good reason: Companies there are more indebted than they were ahead of the last big meltdown a couple decades ago.
A lot has changed since the late 1990s, when a period of credit-fueled growth ended in a wave of defaults and devaluations that swept from Asia through Russia and all the way to Latin America. Governments have built up big reserves to fend off attacks on their currencies, and they aren’t trying to prop up fixed exchange rates like they did back then.