Governments have mostly resisted calls by economists to benefit from low interest rates and increase borrowing. In contrast, companies have taken full advantage of cheap money to load up on debt to the extent that they now look highly exposed in a very uncertain geopolitical and economic environment.
There are two big concerns: leveraged loans and triple-B bonds. A report by the Financial Stability Board (FSB) last December raised red flags over leveraged loans as well as their securitisation into collateralised loan obligations or CLOs.
