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Discussion Paper
Stress Testing the Corporate Debt Servicing Capacity: A Scenario Analysis
The total volume of outstanding debt issued by U.S. nonfinancial firms relative to GDP has increased by about 8 percentage points in the past decade. While a growing volume of debt was largely viewed as benign in the low interest rate environment of the 2010s, the rapid increase in both short- and long-term rates since early 2022 has raised concerns about the debt-servicing capacity of the corporate sector.
Discussion Paper
Corporate Cash Accumulation During the COVID-19 Pandemic
Cash holdings of U.S. nonfinancial (publicly traded) corporations increased notably during the recent COVID-19 pandemic. As depicted in Figure 1, the median cash-to-assets ratio (black, solid line) – which remained near 12 percent in the years following the Great Financial Crisis (GFC) – surged to a historic high of over 20 percent in mid-2021.