The collapsing fortunes of commodity exporters are putting increasing prere on companies from the emerging markets, which have borrowed more than a trillion dollars in dollars, euros and yen since 2009
The bank for international settlements (bis), has for years acted as perhaps the most important reminder of the financial markets. For years, she has also been increasingly harsh in her criticism of the expansionary monetary policy of the leading central banks, emphasizing in particular the consequences for the emerging markets. In this way, the dollars, euros and yen available in abundance were preferentially channelled to the emerging economies, where they led to exaggerations, misinvestment and, above all, excessive indebtedness, which would have disastrous consequences as soon as the international willingness to finance declined. Specifically, the bis has been warning for years about a phenomenon known in financial economists as the "original sin" (erbsunde) – the debt in a different currency than the one in which the revenue is generated.
554 billion dollars in foreign-held bonds
As the bis notes in its latest quarterly report, in the current financial cycle, it was mainly large, internationally active emerging market corporates that took advantage of cheap funding opportunities, iing $554 billion in international debt in foreign currency between 2009 and 2013. Add to this cross-border bank lending, of which $1.1 trillion had flowed to china, $311 billion to brazil, and just over $200 billion each to india and korea at the end of june 2014. The statistics also reflect only a small part of the obligations, since large companies often borrow through subsidiaries in offshore financial centers that do not appear in them.