Credit market turbulence – a brief review As a point of departure, it would be useful to have a common understanding of the factors behind this summer's turbulence. I'll be brief here.
Storz, Koetter, Setzer, and Westphal (2017) find an increase in the leverage of weak firms in stressed economies (such as Greece, Ireland, Portugal, Slovenia, and Spain) and in non-stressed economies (such as Germany and France) alike. 4  Implications for Policy  Financial crises have large and long-lasting effects on the real economy.