Fed finds resilient financial system despite high debt

WASHINGTON (AP) — The Federal Reserve says corporate debt remains at historically high levels but overall the U.S. financial system is resilient, a view in sharp contrast to the problems that led to the 2008 financial crisis.

In its twice-yearly “Financial Stability Report,” the Fed says that the situation has changed little since its previous report in May. At that time, it highlighted concerns about companies’ large amount of outstanding debt — known as leveraged lending — that had grown by 20% last year.

Federal Reserve board member Lael Brainard, who chairs the Fed’s financial stability panel, says the current combination of low interest rates and high levels of risky types of corporate debt “merits heightened vigilance.”

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