The Federal Reserve’s first ever “stability report” warned of a number of dangers to the entire US financial system that could exacerbate problems if the system as a whole sustains significant stress.

The report, released Wednesday, illustrates a slew of vulnerabilities in the US financial system, including excessive asset valuations, historically high borrowing levels by US corporations and the increasing issuance of risky debt.

In the initial years of the post 2009-recovery, companies with high earnings and relatively low debt were doing the most borrowing. But over the past two years, this has changed. The companies taking out the most loans are the ones already in the most trouble. “Firms with high leverage, high interest-expense ratios and low earnings and cash holdings have been increasing their debt loads the most,” the report says.

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