zerohedge.com / by Tyler Durden / Sep 18, 2016 9:15 PM
China’s credit-to-gross domestic product “gap” has reached 30.1%, the highest for the nation in data stretching back to 1995, according to the Basel-based Bank for International Settlements. As Bloomberg points out, the warning indicator for banking stress rose to a record in China in the first quarter, underscoring risks to the nation and the world from a rapid build-up of Chinese corporate debt.
The gap is the difference between the credit-to-GDP ratio and its long-term trend. As BIS explains:
The build-up of excessive credit features prominently in discussions about financial crises.
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