Growth of Global Corporate Debt : Main Facts and Policy Challenges

This paper surveys the literature to document the main stylized facts, risks, and policy challenges related to the expansion of global nonfinancial corporate debt after the 2008–09 global financial crisis. Nonfinancial corporate debt steadily incre...

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Main Authors:	Abraham, Facundo, Cortina, Juan J., Schmukler, Sergio L.
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2020
Subjects:	EMERGING MARKET ECONOMIES CORPORATE BONDS CORPORATE FINANCING CURRENCY RISK CAPITAL RAISING DEBT FOREIGN CURRENCY DEBT GLOBAL FINANCIAL CRISIS SOLVENCY RISK
Online Access:	http://documents.worldbank.org/curated/en/570381599749598347/Growth-of-Global-Corporate-Debt-Main-Facts-and-Policy-Challenges http://hdl.handle.net/10986/34480

id	okr-10986-34480
recordtype	oai_dc
spelling	okr-10986-344802022-09-20T00:11:12Z Growth of Global Corporate Debt : Main Facts and Policy Challenges Abraham, Facundo Cortina, Juan J. Schmukler, Sergio L. EMERGING MARKET ECONOMIES CORPORATE BONDS CORPORATE FINANCING CURRENCY RISK CAPITAL RAISING DEBT FOREIGN CURRENCY DEBT GLOBAL FINANCIAL CRISIS SOLVENCY RISK This paper surveys the literature to document the main stylized facts, risks, and policy challenges related to the expansion of global nonfinancial corporate debt after the 2008–09 global financial crisis. Nonfinancial corporate debt steadily increased after the crisis, especially in emerging economies. Between 2008 and 2018, corporate debt increased from 56 to 96 percent of gross domestic product in emerging economies, whereas this ratio remained stable in developed economies. Nonfinancial corporate debt was mainly issued through bond markets, and its growth can be largely attributed to accommodative monetary policies in developed economies. Whereas increased debt financing has some positive aspects, it has also amplified firms' solvency risks and exposure to changes in market conditions, such as the economic downturn triggered by the COVID-19 pandemic. Because capital markets have a larger role in firm financing, policy makers have limited tools to mitigate the risks of growing firm debt. 2020-09-17T21:15:59Z 2020-09-17T21:15:59Z 2020-09 Working Paper http://documents.worldbank.org/curated/en/570381599749598347/Growth-of-Global-Corporate-Debt-Main-Facts-and-Policy-Challenges http://hdl.handle.net/10986/34480 English Policy Research Working Paper;No. 9394 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	EMERGING MARKET ECONOMIES CORPORATE BONDS CORPORATE FINANCING CURRENCY RISK CAPITAL RAISING DEBT FOREIGN CURRENCY DEBT GLOBAL FINANCIAL CRISIS SOLVENCY RISK
spellingShingle	EMERGING MARKET ECONOMIES CORPORATE BONDS CORPORATE FINANCING CURRENCY RISK CAPITAL RAISING DEBT FOREIGN CURRENCY DEBT GLOBAL FINANCIAL CRISIS SOLVENCY RISK Abraham, Facundo Cortina, Juan J. Schmukler, Sergio L. Growth of Global Corporate Debt : Main Facts and Policy Challenges
relation	Policy Research Working Paper;No. 9394
description	This paper surveys the literature to document the main stylized facts, risks, and policy challenges related to the expansion of global nonfinancial corporate debt after the 2008–09 global financial crisis. Nonfinancial corporate debt steadily increased after the crisis, especially in emerging economies. Between 2008 and 2018, corporate debt increased from 56 to 96 percent of gross domestic product in emerging economies, whereas this ratio remained stable in developed economies. Nonfinancial corporate debt was mainly issued through bond markets, and its growth can be largely attributed to accommodative monetary policies in developed economies. Whereas increased debt financing has some positive aspects, it has also amplified firms' solvency risks and exposure to changes in market conditions, such as the economic downturn triggered by the COVID-19 pandemic. Because capital markets have a larger role in firm financing, policy makers have limited tools to mitigate the risks of growing firm debt.
format	Working Paper
author	Abraham, Facundo Cortina, Juan J. Schmukler, Sergio L.
author_facet	Abraham, Facundo Cortina, Juan J. Schmukler, Sergio L.
author_sort	Abraham, Facundo
title	Growth of Global Corporate Debt : Main Facts and Policy Challenges
title_short	Growth of Global Corporate Debt : Main Facts and Policy Challenges
title_full	Growth of Global Corporate Debt : Main Facts and Policy Challenges
title_fullStr	Growth of Global Corporate Debt : Main Facts and Policy Challenges
title_full_unstemmed	Growth of Global Corporate Debt : Main Facts and Policy Challenges
title_sort	growth of global corporate debt : main facts and policy challenges
publisher	World Bank, Washington, DC
publishDate	2020
url	http://documents.worldbank.org/curated/en/570381599749598347/Growth-of-Global-Corporate-Debt-Main-Facts-and-Policy-Challenges http://hdl.handle.net/10986/34480
_version_	1764480988041183232

Growth of Global Corporate Debt : Main Facts and Policy Challenges

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