We’ve voiced concern about the pace of credit growth in a number of EMs. Worryingly, the composition of banks’ funding appears to have deteriorated at the same time, most notably in Turkey, but also in Thailand and, to a lesser extent, in Brazil and in Singapore. Things aren’t nearly as bad as they were in Central and Eastern Europe during its credit boom in the previous decade. But even so, banks are looking increasingly vulnerable not just to rising non-performing loans, but also to an external shock.
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