External imbalances can threaten financial stability in creditor countries as well as in debtor countries, according to a new paper from the Bank for International Settlements (BIS), which goes on to argue that creditor countries should avoid ‘overlending' and help devise co-operative solutions to excessive or prolonged imbalances.

In Caveat creditor, Philip Turner, director of policy, coordination and administration at the BIS, writes that this is one area where international monetary