Working Paper
Credit booms, banking crises, and the current account
Phoa, Wesley; Mack, Adrienne; Vandenabeele, Anne; Davis, J. Scott (2014-05-13)
What is the marginal effect of an increase in the private sector debt-to-GDP ratio on the probability of a banking crisis? This paper shows that the marginal effect of rising debt levels depends on an economy's external position. When the current account is in surplus or in balance, the marginal effect of an increase in debt is rather small; a 10 percentage point increase in the private sector debt-to-GDP ratio increases the probability of a crisis by about 1 to 2 percentage points. However, when the economy is running a sizable current account deficit, implying that any increase in the debt ...
Globalization Institute Working Papers , Paper 178

Journal Article
Current account surplus may damp the effects of China’s credit boom
Phoa, Wesley; Mack, Adrienne; Vandenabeele, Anne; Davis, J. Scott (2015-01)
In contrast to similar credit expansions in the euro periphery in the 2000s and East Asia in the 1990s, China?s credit boom is far less likely to end in a dramatic bust because it?s financed by domestic savings.
Economic Letter , Volume 10 , Issue 1 , Pages 1-4