While corporate debt is at near-record levels and recent growth has been concentrated in riskier segments, “business debt does not appear to present notable risks to financial stability,” Federal Reserve Chairman Jerome Powell said today in Florida.
Browsing: Leveraged lending
The rapid growth is attributable largely to nonbanks. Should this group of loans start underperforming, the risk to the banking sector is relatively low.
In the wake of the Federal Reserve’s biennial financial stability report released yesterday, which flagged leveraged loans as a risk factor, Fed Vice Chairman for Supervision Randal Quarles suggested that media reports overplayed the scale of the risk, especially to banks.
Credit standards for leveraged loans continued to deteriorate in recent months, with the share of newly issued large loans to highly leveraged corporations now exceeding peak levels, the Federal Reserve said today in its second report on financial stability. T
In a live interview on Bloomberg today, ABA President and CEO Rob Nichols outlined three key policy priorities that ABA is looking to in 2019.
Noting that economic indicators are exceptionally positive, the Treasury’s Office of Financial Research flagged market risk, credit risk and cybersecurity as high or moderate concerns in its annual financial stability report today.
The Federal Reserve is watching growth in the leveraged loan sector with an eye to its systemic implications, Federal Reserve Vice Chairman for Supervision Randal Quarles told the Senate Banking Committee today.
A Federal Reserve official today sounded a warning about “material loosening” of terms, as well as insufficient risk management, in the leveraged loan sector.
In a speech to a banking industry conference today, Deputy Attorney General Rod Rosenstein cautioned regulatory agency heads from substituting informal guidance for notice-and-comment rulemaking, noting that the Administrative Procedures Act provides a clear method for “promulgating regulations that reflect our official interpretation of application of certain laws.”