Japan Economics Weekly Turkish contagion, BoJ’s helping hand A former BoJ executive suggested that the Bank of Japan may tolerate 10-year yields rising to 0.4% even while keeping its official target at zero. This would lift trading income, increase returns on... 17th August 2018 · 1 min read
China Chart Pack Bad loans on the rise Commercial banks’ non-performing loans (NPL) rose by RMB183bn in Q2, the biggest increase in over a decade. On paper, bad loans now make up just under 2% of all loans, the highest ratio since the... 16th August 2018 · 1 min read
Latin America Economics Update Latin America’s banks in good shape Turkey’s currency crisis, which could cause problems in its banking sector, has put the spotlight on EM banking vulnerabilities more generally. But while we had concerns about the health of Latin... 15th August 2018 · 1 min read
Emerging Europe Economics Focus Turkey: what next? The plunge in the Turkish lira is likely to push inflation above 20% and tip the economy into recession in the coming months. Our base case is that GDP growth will now average 3.0% over 2018 as a... 15th August 2018 · 15 mins read
Europe Economics Update Portugal’s banks to support investment-led growth Portugal’s banks have strengthened their balance sheets significantly and look set to support economic growth over the coming years. However, the already-high level of private sector debt is a concern... 15th August 2018 · 1 min read
Japan Economics Update Would abolishing cash help overcome deflation? Abolishing cash would allow the Bank of Japan to cut interest rates deeper into negative territory. But in a society where cash transactions are still widespread, such a move would prove deeply... 14th August 2018 · 1 min read
Emerging Europe Economics Update Where do the risks in Turkey’s banking sector lie? Turkish policymakers have taken steps to support local banks today, but concerns have continued to mount about the health of the sector. Banks appear to hedge all their on-balance sheet FX mismatches... 13th August 2018 · 1 min read
China Data Response Bank Lending & Broad Credit (Jul.) Growth in bank lending picked up last month to the fastest pace this year. However, a further slowdown in other forms of credit, including shadow financing, mean that broad credit growth continued to... 13th August 2018 · 1 min read
Asia Economics Update What does the crisis in Turkey mean for Asia? There is a good chance that the recent volatility in financial markets triggered by the crisis in Turkey will prompt Bank Indonesia into hiking interest rates at its meeting on Wednesday. For most... 13th August 2018 · 1 min read
Japan Chart Pack 0.1% is the new 0% The Bank of Japan’s decision to allow JGB yields to deviate by 0.2 percentage points rather than 0.1 percentage points from its 0% target suggests that long-term bond yields will settle at a slightly... 13th August 2018 · 1 min read
Emerging Europe Economics Update Where to watch for signs of stress in Turkey’s banks? The collapse in the lira has raised concerns about the health of Turkey’s banking sector. Banks’ dollar bonds yields and interbank interest rates are already pointing towards some stress, and these... 10th August 2018 · 1 min read
Global Economics Update How big a worry is Turkey? The plunge in the lira which began in May now looks certain to push the Turkish economy into recession and it may well trigger a banking crisis. This would be another blow for EMs as an asset class... 10th August 2018 · 1 min read
Emerging Markets Economics Update Will Turkey’s crisis affect other EMs? Aside from the impact on a few small neighbouring countries, most notably Bulgaria, the direct risk of contagion from Turkey’s crisis to other EMs is fairly low. However, Turkey’s problems may add to... 10th August 2018 · 1 min read
China Economics Weekly Cuts to official policy rates are coming soon Market interbank rates have now converged with those offered by the People’s Bank in its lending operations. We think the central bank will soon start cutting these official policy rates in order to... 10th August 2018 · 1 min read
Emerging Europe Economics Weekly Turkey on the brink Turkey seems to have been on the brink of a crisis several times this decade, only for the central bank to do just enough to steady the ship. But there are reasons to think that emergency interest... 10th August 2018 · 1 min read
Africa Economics Weekly Ghana Bank rescue, Mozambique debt talks The rescue of five small failing banks in Ghana should help to improve the (fragile) health of the sector and, in time, should help to support a recovery in credit growth. Elsewhere, the resumption of... 10th August 2018 · 1 min read
