Gary Cohn

On banks:

Debt markets that have seen junk-bond yields drop to record lows may face a "substantial repricing" if interest rates spike or investors begin pulling money out of fixed-income. A sudden or large increase in rates would be a shock to markets, presenting "a big risk" with "a low probability. Such a move would potentially be heightened by a liquidity shortage as large banks cut holdings to comply with new capital requirements. "I'm concerned when money starts flowing out of fixed-income funds, with firms trying to reduce their riskweighted assets and firms trying to reduce their balance sheets, who will be the ultimate buyer of those fixed-income products? Someone has to buy them, and maybe it takes a fairly substantial repricing of fixed income to??find the next round of buyers.