The rise in credit spreads this year has been interpreted by some as a signal that the corporate sector is dangerously over-leveraged. At an aggregate level we can find very little evidence of this, however, with any potential problems restricted to a few sectors, the most notable being the energy sector. Relative to corporate net worth, debt remains unusually low and is only two-thirds of the peak in the early 1990s. Similarly the debt to corporate income ratio is unusually low.
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