Covenant-lite, or covlite, transactions now represent roughly 80 percent of the entire leveraged lending market--up from less than 30 percent a decade ago, when they were associated primarily with stronger borrowers.
The final issue I would like to mention is the transmission of monetary policy through the lending channel. A tightening of credit standards by banks might amplify the impulse from monetary policy normalisation. One interesting way to look at this issue is to consider the heterogeneity of banks in terms of (say) market power, screening processes, balance‑sheet strength, and possibly other factors.