GLOBAL regulators should not dismiss “worrying” early signs of unsustainable property price and credit growth, which could leave borrowers vulnerable to interest rate rises, the Bank for International Settlements (BIS) said late Sunday.

    The BIS, the global forum for central banks, said rock-bottom official interest rates, slashed to revive sluggish economies, have contributed to a boom in lending and real estate prices in some countries.

    While the European Central Bank has cut rates to record lows and decided to pump money into the eurozone economy, the U.S. Federal Reserve has hinted at interest rate hikes starting next year.

    “Several early warning indicators signal that vulnerabilities have been building up in the financial systems of several countries,” the BIS said in its annual report.

    While no early warning indicator is completely reliable, dismissing such readings as inappropriate would be too easy, the Basel-based bank said.

    In many emerging market economies and Switzerland the credit-to-GDP gap, measuring the current ratio against its long-term trend, is “well above the threshold that indicates trouble,” it said.(SD-Agencies)