ClaimsNouriel Roubini

“That buildup of excessive and toxic corporate debt became even more extreme after Covid-19.”

Nouriel Roubini, interviewee 3 January 2023 Storm Clouds Looming: Q&A With Nouriel Roubini (Global Finance Magazine)

Factual Economics and markets

Corporate debt and shadow bank lending to companies built up over the last 10 to 15 years, and became even more extreme after Covid-19.

Mostly true True in substance, wrong in a detail.

Factual: Statements about the present or the past, checked against the record: did they hold up?

What would count as true or false

Judge as of Jan 2023. True: data show US and/or global nonfinancial corporate debt (including leveraged loans and private credit) grew substantially over about 2008–2019 and then rose further after Covid (for example corporate debt/GDP or total corporate debt hitting records in 2020–2021, and rapid private credit growth), and authorities such as the Fed, IMF or BIS flagged it as risky or of low quality. Mostly true: the buildup and the post-Covid increase are shown, but the 'more extreme' level was temporary (for example the ratio to GDP fell back by 2022) or the 'toxic' characterisation is debatable. Mixed: the pre-Covid buildup is shown but no meaningful post-Covid intensification. Mostly false: debt grew only modestly. False: corporate debt did not build up or fell after Covid.

Set before the research began.

Evidence (4)

  1. E1 [PDF] U.S. Business Debt: - TD Economics - TD Bank TD Economics (TD Bank Group) · 15 September 2022

    “the ratio of gross debt to gross value added (business sector output) fell from a pandemic high of 143% in the second quarter of 2020 to 112% in the second quarter of 2022, which is consistent with the level experienced prior to the pandemic at the end of 2019.”

  2. E2 Financial Stability Report - May 2022 Board of Governors of the Federal Reserve System · May 2022

    “the share of newly issued loans to large corporations with high leverage—defined as those with ratios of debt to earnings before interest, taxes, depreciation, and amortization greater than 6—exceeded historical highs”

  3. E3 Open Knowledge Repository World Bank · September 2020

    “Between 2008 and 2018, corporate debt increased from 56 to 96 percent of gross domestic product in emerging economies, whereas this ratio remained stable in developed economies.”

  4. E4 Private credit: recent developments and long-term trends | Bank for International Settlements Bank for International Settlements · 1 March 2020

    “The outstanding amount of private credit grew from little more than $300 billion in 2010 to nearly $800 billion in 2018”

Reasoning

E3 and E4 show a pre-Covid buildup. Emerging-economy corporate debt rose from 56% to 96% of GDP between 2008 and 2018, and private credit grew from about $300 billion in 2010 to nearly $800 billion in 2018. However, E3 says the ratio stayed stable in developed economies. E1 shows US business debt peaked at 143% of gross value added in Q2 2020, then fell back to 112% by Q2 2022, its pre-pandemic level. E2 shows the Fed flagged that the share of highly leveraged new loans to large corporations had exceeded historical highs. Together these show a pre-Covid buildup of corporate debt in emerging economies [E3] and of private credit [E4], a temporary post-Covid peak in the US business debt ratio [E1], and a Federal Reserve report that the share of highly leveraged new loans to large corporations exceeded historical highs [E2]. The 'more extreme' level was temporary, which matches the criteria for mostly true.

Cite this claim

Nouriel Roubini, “Corporate debt and shadow bank lending to companies built up over the last 10 to 15 years, and became even more extreme after Covid-19.” (said 3 January 2023). Verdict: mostly true. Reliability API, claim c_db2efa98ab77, method 0.1.0+c876030c, dataset release v1.1.2. https://epistacklabs.com/claims/c_db2efa98ab77

This claim is in dataset release v1.1.2, with the same verdict.

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More factual claims by Nouriel Roubini

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  2. Mixed Factual November 2025
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    Despite a massive boom in AI-related investment in 2025, uncertainty caused by President Trump's tariffs and other policies curtailed US growth in the second half of the year.

  3. Mixed Factual 3 January 2023
    “Stuff that is tech-related is hit by rising interest rates because they are long-duration assets, [which] are more sensitive to interest rates than shorter-duration assets.”

    Tech-related stocks, as long-duration assets, are hit by rising interest rates more than shorter-duration assets.

  4. Mostly false Factual 3 January 2023
    “Food prices were already spiking before the invasion because you have desertification of lots of parts of the world, and therefore the food supply is limited.”

    Food prices were already spiking before the invasion because desertification in many parts of the world limits the food supply.

  5. Mostly true Factual 3 January 2023
    “All the zombie institutions that survived before because we had negative [interest] rates, quantitative easing [and] credit easing, now face rising debt servicing ratios.”

    All the zombie institutions that survived because of negative interest rates, quantitative easing and credit easing now face rising debt servicing ratios.

All of them

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