Leaner Times for Wall Street Bond Traders
These should be good times for Wall Street bond departments. Central banks are pumping unprecedented amounts of money into the financial system to keep borrowing rates low and boost economic growth. To capitalize on the low rates, corporations have issued $18.2 trillion of bonds worldwide since 2008, bringing the total outstanding to $9.6 trillion. Speculative-grade offerings have surged this year to a record $518.9 billion globally. Banks earn about three times more for buying and selling junk bonds than investment-grade debt.
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