The ultra-low interest rates which central banks have facilitated since 2008 have lowered borrowing costs and lending standards, allowing companies to pursue risky and long-term projects by taking on more debt than they otherwise would have found possible, while at the same time making creditors more eager to lend to high-risk companies in pursuit of their accompanying slightly higher returns. When the threat of inflation finally forces central banks to raise interest rates again, as they are already beginning to do, many of these borrowers will be forced to default on their increasingly expensive debts, and the crash will have begun. The greater the extent to which global financial institutions have exposed themselves to these junk debt CDOs by that point, the more quickly will the crisis spread throughout the financial system.
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