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Moody's Corporation

Rising global debt is increasing the risk of another financial crisis

Rising global debt is increasing the risk of another financial crisis

It's not just Greece, Puerto Rico and China. Debt is piling up around the world — stifling global economic growth and heightening the risk of more defaults and market turmoil. World leaders are caught in a trap: More debt in the form of government and private spending is needed to stimulate today's sluggish economies. Yet the higher the debt, the greater the danger that a pullback by creditors will trigger another financial crisis like the one in 2008. "The post-crisis world is a world of high debt, and it doesn't take much. It just takes a bad shock for the debt dynamics to go wrong," warned Olivier Blanchard, the International Monetary Fund's chief...

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