A surge in cheap corporate lending with looser credit standards has “increased the vulnerability” of the global financial system, the Bank of England will warn on Thursday. Its concerns chime with those of Larry Fink, of BlackRock fund management group, who told the FT that standards of lending to highly-indebted companies “have deteriorated to levels that we never… dreamt we would see”. The biggest reason for weakening lending standards is plentiful liquidity and consequent strong investor demand, which is driving investors into illiquid “alternative” investments such as hedge funds and private equity. Click here for the Fink video interview.

This entry was posted by Gwen Robinson on Thursday, April 26th, 2007 at 5:46 and is filed under Capital markets, People. Tagged with bank of england, blackrock, larry fink. Edit this entry.