Accommodative monetary stimulus has encouraged financial risk-taking, leading to “worrisome” levels of debt with poor credit quality, the Fund says.
If the Fed is going to conduct monetary policy by manipulating asset prices, it should expect to see periods of extreme market volatility.
Nonfinancial corporate debt is at a record high, and for some companies the leverage is unsustainable, says an IIF paper.
With corporate debt running at 145% of China's GDP, a top Fund official urges Beijing to tackle the "key fault line" in the economy soon.
The rating agency said it downgraded 892 corporate issuers (accounting for about $6.9 trillion in rated debt) in 2015.
