Under these circumstances, the amount outstanding of lending by private banks has been increasing moderately, and the amount outstanding of CP and corporate bonds issued has been above the previous year's level. II.
Spurred on by low interest rates, investors are sailing close to the wind and the appetite for risk is high. This is reflected in high price-to-earnings ratios on equity markets, ever-lower risk premiums on risky bonds, and historically high issuance levels of risky corporate debt, which is often also highly leveraged. This risky behaviour is only sustainable at low inflation and interest rates.