Who actually holds the global debt?
By International Adviser, 8 Jun 18
Despite much talk of debt reduction and deleveraging since the financial crisis, global debt levels are higher than ever before. Several risks arise for investors and for financial and economic stability, according to Daniel Murray, head of global research at EFG Asset Management.
Currency mismatch
Some of the debt issued by emerging market companies in the last 10 years has been denominated in foreign currency.
This means that there is a risk of not being able to make debt servicing payments if the domestic currency of the issuer were to fall in value.
That has been a common issue in emerging market financial crises in the past – notably in the Asian financial crisis in 1997 and in Argentina’s 2001 default.
Tags: EFG
