As central banks withdraw liquidity from global markets, the countries most dependent on borrowed money will be vulnerable. The global regime of quantitative easing drove investors into riskier assets, including the debt of countries with large borrowing requirements. The chart below shows current account deficits as a percentage of GDP.
At the top of the charts are export titans like the oil producers and the Northern European economies; at the bottom are Ukraine, South Africa, Brazil, Turkey–and the United Kingdom. Not all deficit countries are in for trouble, but we would watch Brazil and Turkey closely as real rates rise.