Although the bulk of the increase is explained by China, whose corporate sector debt rose from 107 to 163 percent of GDP during the same period, a similar trend is observed in many other EMDEs.8 The increased leverage of EMDE non-financial corporates acquires particular relevance as a source of concern for at least a couple of reasons.
Having such an objective in place would prove particularly useful in the current environment in which the Fed is providing monetary stimulus using new tools that are not as familiar to the public and the markets. It will also help at a time when some may view the fiscal situation as threatening the independence of monetary policy.