What we don't know the state of
credit default swaps held by banks
against sovereign debt and
against European banks, nor do we know the state of CDS held by British banks, nor are we certain of how certain the
exposure of British banks is to the Ireland sovereign debt problems.»
To date, we do not see a systemic threat from leveraged lending, since broad measures of
credit outstanding do not suggest that nonfinancial borrowers, in the aggregate, are taking on excessive debt and the improved capital and liquidity positions at lending institutions should ensure resilience
against potential losses due to their
exposures.