Few signs of financial stress as credit bubbles deflate

Our latest Banking Heat Map shows that Latin America’s credit bubbles are gradually deflating and so far this does not appear to have triggered widespread problems in the region’s banking sectors. Non-performing loans have edged up, particularly in Brazil, but they remain low and at an aggregate level banks are relatively well capitalised. Nonetheless, deleveraging is still in its early stages and at best the process will remain a headwind to economic growth for some time.