Or maybe you were born in 2009?
FSB:
"Available data indicates that banks have the largest direct exposures to leveraged loans and CLOs. These exposures are concentrated among a limited number oflarge global banks and have a significant cross-border dimension.
... A number of non-bank investors are also exposed to leveraged loan and CLO markets. These include investment funds, insurance companies, pension funds, broker-dealers and holding companies.
... A comprehensive assessment of the system-wide implications of the exposures of financial institutions to leveraged loans and CLOs is challenging.
... These exposures are generally concentrated among a limited number of banks. These banks’ exposures to leveraged loans and CLOs, on a fully drawn basis, are significant relative to their capital adequacy ratios.
"Similar to other markets, the leveraged loan and CLO markets include direct and indirect forms of interconnectedness, both within and across borders. Direct interconnectedness arises from links in the intermediation chain, from origination and distribution of leveraged loans to securitisation by CLO manager.
... Through these direct links, shocks to the leveraged loan and CLO markets could transmit risks to financial intermediaries not directly exposed to such markets.
... Indirect interconnectedness can arise in the form of common exposures of banks and non-banks to leveraged loans and CLOs, and could provide an avenue for contagion among financial institutions."
https://www.fsb.org/wp-content/uploads/P191219.pdf
Fed:
"Similarly, vulnerabilities stemming from leveraged lending were increasing through mid-February 2020, as demand remained strong while credit standards stayed weak. Issuance came to a halt at the end of February, as investors became more cautious and attentive to volatility in financial markets...
Defaults on leveraged loans ticked up in February and March and are likely to continue to increase, with the specific contour highly dependent on the path of overall economic activity. Such developments would weaken the balance sheets of lenders, including CLOs that hold leveraged loans, and amplify the economic effects of COVID-19."
https://www.federalreserve.gov/publications/files/financial-...
