6  BIS Review 165/2009  Second, the extent and diversity of investment practices across all segments of the financial system requires particular attention. For example, fast-growing credit to similar sectors or regions could be a sign of vulnerabilities building up. The imbalances might become unsustainable later and unravel in a disorderly fashion. This risk requires looking at earlywarning signals in current market data.
For example, aggregate credit might grow at a pace that is disproportionate to the credit required to finance sustainable investment and consumption. The complete set of important intermediaries, markets and instruments also needs to be checked for early-warning signals, since similar risks could be hidden in different parts of the financial system.