Moreover, the exceptionally low levels of default rates in corporate sector might turn up again. Ample stress-testing has been conducted to evaluate the effects of various scenarios of rising interest rates, and the banks seem to be well prepared for this event. However, we should remain vigilant with respect to this risk.
Second, banking activities involving high direct leverages such as leveraged buy-outs and indirect leverages such as investment in hedge funds are gaining importance. High leverages increase the vulnerability to unexpected events, and the volumes in these types of businesses underscore the  BIS Review 106/2006  1  significance of this matter.