Personal equity assets have increased sevenfold since 2002, with annual deal task now averaging more than $500 billion each year. The common leveraged buyout is 65 % debt-financed, producing an enormous rise in interest in business financial obligation funding.
Yet just like personal equity fueled an enormous upsurge in interest in business financial obligation, banks sharply restricted their experience of the riskier areas of the business credit market. Not merely had the banking institutions found this sort of financing become unprofitable, but federal government regulators had been warning so it posed a systemic danger to the economy. Read more