The global financial system has weathered well remarkably well the momentous downgrade to junk status of General Motors, the iconic American automotive manufacturer. In fact, The consequences of the downgrade have been unexpected. But the aftermathdynamics have differed significantly from historically-based expectations. Things that should have happened have not, and vice versa. ” haven’t, while those that “shouldn’t” have. In the process, Thus policymakers and investors have been offered important insights into the changing realities of a global financial system that, along with the broader economy, its economic underpinnings, is undergoing a major secular transformation.

GM’s downgrade to junk status was notable in three major respects. First, it affected impacted one of the largest issuers of corporate debt in the world. Second, it signalled that US companies, regardless of no matter how venerable, are not immune from to the forces of international competition. Third, it highlighted the macro employment challenge facing industrial ­countries as cyclical expansionary impulses wane while demographics make pension and healthcare costs more onerous.