Asia is on the verge of a possible financial crisis, according to political analysts, with Malaysia ranked third to the point where it starts.
Compared with the 1997 Asian financial crisis that began in Thailand, analyst Alastair Newton said, the crisis occurred due to domestic debt.
"It is not the crisis of 1997 again, not because of external debt.
"It's more about the 2007 version of the Asian crisis (the subprime mortgage crisis in the United States). It concerns the domestic debt and rising asset prices due to the continued low interest cistern.
"This will lead to major stress in the financial system," he said in Petaling Jaya, this morning.
Former British ambassador was speaking at the World Economic Conference 2016, organized by think-tanks, the Chinese Chamber of Commerce and Industry of Malaysia (ACCCIM), Socio-Economic Research Centre (SERC).
Topping the list of countries that are vulnerable to such a crisis, Newton said, is China and Hong Kong, followed by Thailand and then Malaysia.
He was commenting on the discovery by a former colleague who is also an economist, Robert Subbaraman.
Subbaraman, he said, has studied five different indicators of risk in the four quarters prior to this in various countries in the Asian region (excluding Japan).
However, Newton explains, Subbaraman not see the political risks that could lead to a financial crisis, and the election of the Legislative Council of Hong Kong's future can possibly be the trigger.
"Both of us believe China will handle it (the crisis), but the risk is great weakness. If China is stuck, I do not need to explain how serious the situation is for all of us, "he said.
Various parties had previously expressed concerns about the debt situation in Malaysia, whether in the form of government debt (mainly domestic debt), household debt and corporate debt.
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