LinkedIn | Mon, Sep 10, 2018
by Susan Lund
This month will mark the 10-year anniversary of Lehman Brothers’ collapse. In many ways, the global financial system is better off as a result of the extraordinary stabilization measures taken after 2008. But some familiar risks are creeping back, and new ones have emerged.
Underneath that headline number are important differences in who has borrowed and the sources and types of debt outstanding. Governments in advanced economies have borrowed heavily, added $31 trillion. But less noticed is that nonfinancial company debt has grown by nearly as much. China alone accounts for more than one-third of global debt growth since the crisis. Households have reduced debt in the core crisis countries, but it continues to grow in a range of other countries, including Canada, Australia, and China. Nonbank lending is on the rise, including from corporate bond markets, private credit funds, nonbank mortgage lenders, and P2P lending platforms.