We have previously identified six emerging markets where credit growth appears to be unsustainable: Brazil, China, Hong Kong, Singapore, Thailand and Turkey. In the event of a crisis, past experience suggests that the authorities would have to tighten monetary policy. This time around, however, we think there's scope for policymakers in some of the EMs in question to cut interest rates. Even so, credit conditions in the real economy would be likely to tighten.
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