IslamicFinance.de

Global consulting firm McKinsey is warning that signs of an Asian debt crisis are "ominous". Increased indebtedness, stresses in repaying borrowing, lender vulnerabilities and shadow banking practices are some of the concerns. McKinsey examined the balance sheets of more than 23,000 companies across eleven Asia-Pacific countries, and found firms in most of Asia face "significant stress" in servicing debt obligations. In countries such as China and India, those pressures have risen since 2007, while falling sharply in the U.S. and U.K. during the same period. Since 1997, financial regulators have put in place safeguards to prohibit a repeat of the crisis that engulfed Asian nations. Potential triggers of a crisis that need to be monitored include defaults in repayment of debt, liquidity mismatches, and large fluctuations in exchange rates, according to McKinsey.