HOUSTON, Feb. 7, 2020 /PRNewswire/ -- Nonfinancial
debt, specifically the relatively high ratio of business leverage,
is drawing attention from economists working in policy and finance
spheres, according to a recent publication by BBVA Senior Economist
Filip Blazheski.
This high ratio comes on the heels of over a decade of
accommodative monetary policy worldwide and is now recognized as a
potential source of financial instability. Unlike household debt,
which has declined in relative terms since the Great Recession,
business leverage has continued to trend upwards.
According to the report, BBVA Research's recent analysis of
recession triggers suggests that unlike the last recession,
which was a result of household overextension, the next recession
could very likely be caused or exacerbated by unsustainable
business indebtedness.
Corporate debt can take several forms, including both bank and
non-bank loans.The volume of outstanding loans to nonfinancial
corporations has increased by close to $1
trillion in the last three years, a significant portion
through foreign entities and non-banks. The increase in funding of
corporate loans by non-banks has gone hand in hand with the
evolution of collateralized loan obligations (CLOs), instruments
through which corporate loans are securitized.
The brief provides a detailed look at CLO composition, the CLO
market size and its importance to corporate finance, as well as the
potential risks of CLOs precipitating market dislocations going
forward.
Read the full report here.
See the complete library of BBVA Research publications here.
For more BBVA news visit, www.bbva.com and the U.S.
Newsroom.
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For more financial information about BBVA in the U.S., visit
bbvausa.investorroom.com.
About BBVA
BBVA Group
BBVA (NYSE: BBVA) is a customer-centric
global financial services group founded in 1857. The Group has a
strong leadership position in the Spanish market, is the largest
financial institution in Mexico,
it has leading franchises in South
America and the Sunbelt Region of the United States. It is also the leading
shareholder in Turkey's Garanti
BBVA. Its purpose is to bring the age of opportunities to everyone,
based on our customers' real needs: provide the best solutions,
helping them make the best financial decisions, through an easy and
convenient experience. The institution rests in solid values:
Customer comes first, we think big and we are one team. Its
responsible banking model aspires to achieve a more inclusive and
sustainable society.
BBVA USA
In the U.S.,
BBVA is a Sunbelt-based financial institution that operates 641
branches, including 330 in Texas,
89 in Alabama, 63 in Arizona, 61 in California, 44 in Florida, 37 in Colorado and 17 in New Mexico. The bank ranks among the top 25
largest U.S. commercial banks based on deposit market share and
ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (6th). In the U.S., BBVA has been
recognized as one of the leading small business lenders by the
Small Business Administration (SBA) and ranked 8th nationally in
terms of dollar volume of SBA loans originated in fiscal year
2018.
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SOURCE BBVA USA