US Federal Reserve Governor Lael Brainard said widening US financial exposure is being fueled by rising corporate debt and weaker underwriting standards for high-risk loans to companies.
Fed economists’ analysis suggests that “financial vulnerabilities are building, which might be expected after a long period of economic expansion and very low interest rates,” she said in a speech* in Detroit on Wednesday.
“Rising risks are notable in the corporate sector, where low spreads and loosening credit terms are mirrored by rising indebtedness among corporations that could be vulnerable to downgrades in the event of unexpected adverse developments,” Brainard said.
Fed's Brainard flags growing US financial 'vulnerabilities,' citing corporate debt
13 September 2018 8:58pm