Keeping a watch on emerging market corporate debt

A deep financial system generally fosters economic growth. But it can be problematic for the domestic banking sector when corporate and household debt levels rise too strong. A useful if imperfect early warning indicator is the deviation of private sector debt in relation to GDP from its long-term trend. When the gap widens too far, countries should check if their banking system is equipped to handle the risks.

Keeping a watch on emerging market corporate debt(PDF, 67 KB, non-accessible)