“An escalation in trade tensions, geopolitical uncertainty, or other adverse shocks could lead to a decline in investor appetite for risks in general,” the report said. “The resulting drop in asset prices might be particularly large, given that valuations appear elevated relative to historical levels.”
“High leverage has historically been linked to elevated financial distress and retrenchment by businesses in economic downturns”
“Given the valuation pressures associated with business debt ... such an increase in financial distress, should it transpire, could trigger a broad adjustment in prices of business debt.”
Submitted November 28, 2018 at 10:26AM by ConcreteCrusher https://ift.tt/2E1GSxZ
