The troubles at Brazilian bank Banco Master that have grabbed the headlines recently seem to be contained and, by most measures, the banking sector as a whole appears to be in good shape. But there has been a sharp run-up in lending to households over the past few years and the backdrop of slowing growth and higher interest rates may lead to rising bad loans. Banks are well placed to weather any storm, although credit conditions would probably tighten and act as a further brake on the economy.
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