Globally, credit markets were traditionally dominated by banks and other financial institutions that provided loans primarily to large corporations and governments. The landscape began to change significantly in the 1980s with the advent of the high-yield bond market, pioneered by Michael Milken as mentioned in earlier entries. By the end of the 1980s, the U.S. high-yield bond market had grown to over $190 billion in outstanding debt, and it has continued to expand, peaking at $1.7 trillion by 2023.
During the 1990s and early 2000s, the globalization of financial markets accelerated, driven by advancements in technology, the liberalization of capital markets and the proliferation of financial instruments. This period saw the rise of securitization, which allowed for the pooling of various types of debt (such as mortgages and credit card receivables) and the selling of the resulting securities to investors. By 2007, the global market for asset-backed securities (ABS) had grown to over $2 trillion.
