Could the explosion of corporate debt lead to a new financial crisis?
Share Now on:
Picture this scenario: Low interest rates and easy credit lead to borrowers taking out lots of loans, including high-risk loans. Financial institutions bundle those loans into new investment products, which are snapped up by the financial sector.
That describes both the subprime mortgage market that sparked the 2008 financial crisis and today’s corporate debt.
Corporate debt in the United States has risen to a near-record high, almost 50% of the gross domestic product. And in September, corporations sold $434 billion worth of bonds globally — the most ever.
That’s spurred concerns among some economists that the corporate debt binge is unsustainable and could lead to a future crisis.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.