THE LEX COLUMN: Brian Moynihan warns on leveraged loan explosion
Bank of America CEO Brian Moynihan warns low-grade bank lending is benign for now. But it could get ugly if the US economy slows down
Too much pie could be bad for you. But it is not often that a baker will publicly offer that message. Last week Bank of America CEO Brian Moynihan warned of the consequences of the $2-trillion leveraged loan explosion.
The impact of low-grade bank lending is benign for now, he said. But it could get ugly if the economy slows down. Some seized on the comments as proof that lending standards had eroded in recent years. But the question remains: what, if any, systemic consequences would arise from an elevated level of corporate collapses?