IMF warns of new financial crisis if interest rates rise

Fund says governments in emerging markets should prepare now for a new credit crunch because of a 10-year corporate borrowing binge

Rising global interest rates could prompt a new credit crunch in emerging markets, as businesses that have ridden the wave of cheap money to load up on debt are pushed into crisis, the International Monetary Fund has said.

The debts of non-financial firms in emerging market economies quadrupled, from $4tn (2.6tn) in 2004 to well over $18tn in 2014, according to the IMF's twice-yearly Global Financial Stability Report.

Related: IMF's emerging markets warning is timely