Beware of credit markets

Credit as an asset class is one of the largest and, according to Patrick Brennan (pictured), head of credit investments at NewFinance Capital, it is a bubble that is about to pop. Credit risk in the US has gone from 15% of gross domestic product (GDP) to 270%.

Brennan says the US credit market growth was fuelled by excess lending in the banking system. As the shortfall in global banks' assets to deposits plunged, this caused a collapse in market liquidity. Liquidity evaporated as inter-bank lendi