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McKinsey Report Assesses Post-Crisis Landscape, Current Risks

A report from consulting firm McKinsey analyzes the financial crisis and contributing factors -- high debt levels, a decline in the housing market, exotic financial products – ten years after the fall of major banks and a global recession that spurred major regulation and required several years of recovery. McKinsey also reviews the current landscape for similarities and differences in the period before the financial crisis. The report notes that global debt continues to grow; households have reduced debt, but many are far from financially well; banks are safer but less profitable; the global financial system is less interconnected—and less vulnerable to contagion. The report also observes that there are new risks worth watching, including: the growth of corporate debt in developing countries in a rising interest rate environment; a decline of credit quality as the corporate bond market has grown; sky-high housing prices in urban areas; and the rise of emerging technologies like cryptocurrencies which muddies the implications for monetary policy and financial stability.