Failure to curb ‘binge borrowing’ could worsen downturn – Yellen
“Excessively” high corporate borrowing may trigger a “wave of corporate defaults”
The failure of regulation to curb corporate borrowing could cause the economic fallout of the coronavirus to be longer-lasting that it otherwise would have been, former Federal Reserve chair Janet Yellen warns.
Regulators had “few, if any” tools to contain “binge borrowing” by large corporations in the years preceding the current crisis, Yellen said in a virtual Brookings Institution panel discussion on March 30.
Regulatory changes in the money markets following the crisis have also proved to
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