Financial stability risks: implications of rising corporate leverage
Gradual monetary tightening should moderate higher funding costs, but will still pressure highly leveraged issuers. Some assets could be at risk of correction if market sentiment turns. On this page, you will find our research on financial stability.
  • SUMMARY
  • REPORTS

  • SECTOR IN-DEPTH
    17 Sep 2019|Moody's Investors Service
    The current US economic expansion, now in its 11th year, is the longest in American history. As growth slows and credit risks rise, market participants are increasingly interested in the potential length and severity of the default cycle in the next recession.

    SECTOR IN-DEPTH
    12 Sep 2019|Moody's Investors Service
    US interest rates are likely to remain low for some time, which will have a large impact on the financial strategies of US bank and non-bank financial institutions. The low rate environment will encourage more risk-taking, as well as further consolidation of banks in the US.
    SECTOR COMMENT
    23 Aug 2019|Moody's Investors Service
    The revised rules would leave most trading restrictions in place for the largest US banks, but would narrow its scope and significantly reduce compliance requirements for all other banks.

    SECTOR IN-DEPTH
    09 Sep 2019|Moody's Investors Service
    Although we do not expect a US recession in 2019 or 2020, the number of defaults and downgrades of rated US nonfinancial companies will likely hit a record high when the next recession does occur. The increase will result from a sharply higher tally of issuers with low corporate family ratings and loan ratings.
    SECTOR IN-DEPTH
    10 Sep 2019|Moody's Investors Service
    Distress at the regional bank level could lead to tighter liquidity throughout China’s financial sector, heightened risk aversion in credit markets and reduced credit supply for the real economy. A speedy policy response would be key to limiting resolution costs and contagion.
    SECTOR IN-DEPTH
    21 Aug 2019|Moody's Investors Service
    We expect the default rate to stay low in 2019 but default risk may increase in the second half because of slowing economic growth and trade disputes.

    SECTOR COMMENT
    23 Aug 2019|Moody's Investors Service
    Market turmoil is causing a significant reduction on foreign currency deposits, although risks for banks are mitigated by their strong liquidity.