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Latin America’s credit bubble deflates

Our latest Banking Heat Map shows that credit bubbles across Latin America have started to deflate. So far at least, this does not appear to have triggered widespread problems for the region’s financial system. While default rates are edging up, they remain low. That being said, the process of deleveraging has much further to run and, if nothing else, is already adding to the headwinds to economic growth facing the region.

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