The record run of low interest rates across the Asia Pacific region is leading to elevated risks, and consumers and businesses keep borrowing.Moody's Investors Services says that many banking systems in the Asia Pacific region will remain exposed to elevated levels of private sector leverage, although the build-up of such leverage has slowed.Private sector credit as a percentage of GDP rose in 12 of the 14 major Asian systems over the past decade, led by China, Hong Kong, Singapore, Korea and Vietnam, according to a newly released Moody's report.Moody's analysis of leverage hot spots in Asia suggests that risks posed by household credit are more prevalent in Australia, Korea and New Zealand, and also elevated in the emerging economies of Malaysia and Thailand. Moody's assessment is based on its analysis of household leverage relative to GDP, per capita income, interest rate levels and trends, and property price developments."Elevated and rising private leverage represent a negative credit development for the banks, because this situation undermines the resilience of borrowers to economic shocks, and constitutes a structural banking system vulnerability," says Christine Kuo, a Moody's senior vice president."The banks are not only exposed to direct default risks on their exposures, but also to an economy's broader adjustments to a debt overhang, including the risk of an economic slowdown and deep asset price corrections," added her colleague Eugene Tarzimanov, a senior credit officer at Moody's and co-author of the report. "The build-up of these long-term risks contributed to a number of Moody's bank downgrades in 2016 and 2017."Based on Moody's analysis of corporate leverage relative to GDP, interest coverage ratios, and capital structures, China and India are the most exposed to high corporate leverage risks, followed by Indonesia, Vietnam, Korea and Hong Kong.