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Mapping global debt danger zones as alert sounds over credit trigger for a new crisis

Posted by Oxford Economics on Nov 6, 2017 9:27:00 AM

Ten years on from the global financial crisis, and eyes are peeled for triggers for a new world economic upheaval.  And chief among the prime suspects is debt, and especially household debt.

Last month, the International Monetary Fund highlighted the danger from big increases in both the level of household debt and the pace at which it is rising in many key economies.  “Higher household debt is associated with a greater probability of a banking crisis, especially when debt is already high, and with greater risk of declines in bank equity prices,” the Fund warned in its influential Global Financial Stability Report.

Building on the IMF’s analysis, Oxford Economics has put the debt bogeyman under the spotlight.

We investigated just how great the risks really are, and just where they may lie, country by country, creating a global risk map to identify the debt danger zones to the world economy.  This goes beyond the Fund’s study which while looking at 80 economies and across 25 years of data stopped short of naming the countries where the risks loom largest.

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Topics: Household debt, Financial crisis, Financial stability, Credit risk, Australia, Canada, Korea, Norway, Switzerland, Global economics

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