International credit, defined here as foreign currency and cross-border credit, can pose particular risks to an economy that is experiencing rapid domestic credit growth. Financial crises in the past two decades have often followed periods of rapid credit expansion accompanied by buoyant asset prices in equity and real estate. In Asia, these risks became evident in the Asian financial crisis of 1997–98. More recently, the countries most affected by the global financial crisis have demonstrated these risks anew. When credit grows rapidly, international credit tends to gain share in overall credit. This association spans fixed and floating exchange-rate regimes, and even economies within currency areas (eg Ireland.
