Powell says he sees 'moderate' risk from corporate debt

May 20, 2019 - 6:00 pm

WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell says a sharp rise in corporate debt is being closely monitored but currently the Fed does not see the types of threats that triggered the 2008 financial crisis.

In remarks prepared for a banking conference in Fernandina Beach, Florida, Powell says views about risker corporate debt — known as leveraged lending — range from "this is a rerun of the subprime mortgage crisis" to "nothing to worry about here."

Powell said his view lies somewhere in the middle. He said the risks currently are "moderate."

His comments followed a Fed report earlier this month which showed that riskier corporate debt had grown by 20% in 2018 to $1.1 trillion, prompting the attention of regulators.

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