big new risks to systemically important
Corporate Britain’s increased dependency on debt over the past few years creates “big new risks to systemically important employers, not only for jobs but for taxpayers,” says Liam Byrne, a former Labour Treasury minister who chairs Parliament’s business and trade committee.
“There are four to five highly leveraged general retailers like Morrisons and Asda, companies employing hundreds of thousands of people, owned by private equity firms that are taking risks in the dark. That’s a dangerous place for UK capitalism to be.”
From pubs and gyms to Madame Tussauds, every kind of consumer business was fair game. The bet was that while these were often low-margin companies, they tended to own lots of buildings, and knockdown prices and near-zero interest rates made them look like surefire winners.
Many were piled up with debt to pay for the splurge, pushing the amount of leveraged loans and high-yield bonds issued by UK companies to a record £200 billion plus, according to data compiled by Bloomberg.
Bloomberg 20 May 2024
Post-2008 regulations may save us from a bank panic.
The danger is every other financial institution
https://englundmacro.blogspot.com/2023/04/post-2008-regulations-may-save-us-from.html
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