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Rising credit risk threatens U.S. financial stability: federal monitor 

December 17, 2015

Lisa Lambert, Reuters

Businesses around the world have been ravenously borrowing in recent years and elevating credit risk to a level that could be hazardous to the health of the U.S. financial system, according to a report released on Tuesday by the federal office monitoring the country's financial stability.

Overall, the Office of Financial Research found "threats to U.S. financial stability remain moderate — that is, in a medium range."

Particular threats have grown in the last year, though, and a shock to U.S. corporate or emerging market credit quality could harm the stability the country has slowly rebuilt since the financial crisis, the office, created by the 2010 Dodd-Frank Wall Street Reform law, said.

Business debt growth "continues at a rapid pace," as underwriting standards and low interest rates allow for easier borrowing. Now, the ratio of corporate debt to GDP has reached an historic high, it found. Read more



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