When it comes to debt, size doesn't matter anymore

To address an evaporation of investor demand and potential forced selling, policymakers would have to increase their intervention in markets by mandating minimum capital and liquidity reserves

Some investors are fretting that the massive global buildup of debt since the financial crisis a decade ago can’t be sustained. It can, at least for a bit longer -— but only at the risk of a more severe correction in the future. That’s because this particular credit cycle may not be typical. The current expansion is largely policy-driven. Governments and central banks have actively encouraged debt-driven consumption and investment in order to prop up growth. Abundant liquidity, central bank debt purchases, and zero or negative interest rates have allowed surprisingly high levels of debt to be sustained and serviced.

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