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EM banks well placed to face rising loan losses

EM banks will face an increase in loan losses this year, but the good news is that banking sectors on the whole appear well-placed to absorb these, particularly in parts of Latin America, Emerging Europe and the MENA where capital buffers are high. That said, India’s banking sector remains a weak link, loan loss absorption capacity looks low in parts of Asia and there are some tail risks in Poland, Colombia and Israel.

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