Although higher corporate debt could hurt the economy, Federal Reserve Chair Jerome Powell argued changes made since the last crisis will guard against a meltdown.
The ranking Democrat on the Senate Banking Committee says he wants answers from the Financial Stability Oversight Council on efforts to address corporate debt risks.
The central bank said that while financial markets' desire for higher yields raises the potential for losses, capital and liquidity safeguards temper any concerns about a looming crash.
The administration’s move seems aimed at cutting down on regulation. But broader reviews by the White House under the Congressional Review Act could hinder rules the industry supports.
Amid widespread concern about their exposure to leveraged lending, the debt rating agency says banks have sufficient earnings and capital cushions to continue investing in the sector.
