Let me read the part on recommendations: “Measures to induce creditors and investors to act with greater discipline (i.e., to analyse and weigh risks appropriately in their lending and investment decisions), should aim at avoiding excessive leverage and encouraging more prudent assessment of the risks associated with lending to ….. emerging markets!” The main concern ten years ago was that the international financial system would be put under stress again by emerging markets, not by the core of the system, as if the underestimation of risks could not happen in advanced economies.
At the same time, the cost for firms of issuing equity is still high. Many firms and households have taken on more debt to weather the pandemic. Any worsening of the economy could therefore threaten their financial health, which could trickle through to the quality of banks’ balance sheets.