Credit growth needs to slow further

We have been warning for some time that parts of Asia are experiencing an unsustainable credit binge, and that credit growth will need to slow for a crisis to be avoided. Encouragingly, credit growth has been slowing recently in China, Hong Kong, Singapore and Thailand, the four countries which we previously identified as being most at risk of a crisis. That said, in all four, credit is still growing faster than nominal GDP, which means that risks are continuing to build.