Corporate debt levels would amplify downturn, Brainard warns
CCyB should be used when stability risks are inconsistent with dual mandate, governor says
Federal Reserve governor Lael Brainard has hinted that measures to curb financial vulnerabilities should be used, warning that the corporate debt market could amplify a future downturn.
Leveraged lending, corporate debt-to-asset ratios and the share of low-rated investment-grade bonds are all likely breaching levels that could be expected to amplify a downturn, Brainard warned in a testimony to the House of Representatives’ subcommittee on financial services today (September 25).
Historically
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