Global central bank assets just reached $31T for the first time. Insurers warn of ‘zombie company’ debt time bomb. Intangible assets make up as much as 70% of S&P 500’s total book value

Unsustainable corporate and government debt racked up during the coronavirus pandemic is emerging as a major credit risk to the global economy and trade.

Unsustainable corporate and government debt racked up during the coronavirus pandemic is emerging as a major credit risk to the global economy and trade.

Marsh, one of the world’s biggest insurance brokers, says its annual political risk map has tracked the largest ever increases in economic risk for 2021, which is also characterised by inequality between rich and poor nations and advancing trade nationalism.

“Strains on public financing in emerging markets will result from increases in sovereign indebtedness and may create unfavourable conditions for domestic and foreign-owned businesses,” the broker says.

“Increased sovereign risk can ultimately lead to government defaults, currency crises or even an inability to convert local currency into hard currency, and to transfer such currency out of the country,” Megan Marshall, global sales leader of Marsh’s credit specialties practice, tells GTR.

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