When the head of the Fed comes out and says it also, you know it's a wrap... Bernanke said Subprimes are good, then said Subprimes were contained few months before Lehman... The Fed chairs are notoriously known to lie and that everything is always good, so for Powell to come out and even acknowledge some of it...
https://markets.businessinsider.com...siness-debt-a-moderate-risk-2019-5-1028218876
Many older articles late 2018 detailing situation on the exact numbers, but this article highlights a speech he gave Monday evening.
The central bank chief warned overly indebted firms could endure "severe financial strain" if the economy weakens, and a highly leveraged business sector could exacerbate an economic downturn as companies are forced to lay off workers and reduce investment.
However, the build up of business debt "does not present the kind of elevated risks to the stability of the financial system that would lead to broad harm to households and businesses should conditions deteriorate," Powell said.
"In public discussion of this issue, views seem to range from 'This is a rerun of the subprime mortgage crisis' to 'Nothing to worry about here,'" he added. "At the moment, the truth is likely somewhere in the middle."
Powell acknowledged similarities between the recent spike in business debt and the lending boom that preceded the global financial crisis. Debt has surged to historic highs and outpaced growth in borrowers' incomes, lenders have loosened their underwriting standards, and much of the borrowing is financed outside the banking system.
https://markets.businessinsider.com...siness-debt-a-moderate-risk-2019-5-1028218876
Many older articles late 2018 detailing situation on the exact numbers, but this article highlights a speech he gave Monday evening.
The central bank chief warned overly indebted firms could endure "severe financial strain" if the economy weakens, and a highly leveraged business sector could exacerbate an economic downturn as companies are forced to lay off workers and reduce investment.
However, the build up of business debt "does not present the kind of elevated risks to the stability of the financial system that would lead to broad harm to households and businesses should conditions deteriorate," Powell said.
"In public discussion of this issue, views seem to range from 'This is a rerun of the subprime mortgage crisis' to 'Nothing to worry about here,'" he added. "At the moment, the truth is likely somewhere in the middle."
Powell acknowledged similarities between the recent spike in business debt and the lending boom that preceded the global financial crisis. Debt has surged to historic highs and outpaced growth in borrowers' incomes, lenders have loosened their underwriting standards, and much of the borrowing is financed outside the banking system.
