In 2010, in the wake of the global banking crisis, 34 of the world’s richest nations – those that belong to the Organisation for Economic Cooperation & Development (OECD) – ramped up their borrowing to $10.9 trillion. In 2019, the OECD revealed last week, those same governments took their borrowing to a fresh high of $11.4tn.

And those fears don’t stop at government debt. The OECD has spent the past couple of years warning about the colossal sums that corporations have borrowed.

In a separate assessment last week, it said non-financial businesses – that is, those outside the banking and insurance sector – issued $2.1tn in bonds. This is borrowing in addition to the overdraft facilities and bank loans these companies use to fund their activities.

“”Compared with previous credit cycles, today’s stock of outstanding corporate bonds has lower overall credit quality, higher payback requirements, longer maturities and inferior covenant protection. These are features that may amplify the negative effects that an economic downturn would have on the non-financial corporate sector and the overall economy.””



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