By Richard Hubbard
LONDON (Reuters) - A surfeit of liquidity in the financial markets is tempting bankers to underwrite and finance deals that may come back to haunt them, a top banker at Goldman Sachs said on Thursday.
Eugene Leouzon, the chief underwriting officer for Europe and Asia at Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) who sits on the investment bank's global credit committee, said the current conditions were unparalleled in his experience of investment banking.
"The markets are really, really red hot," said Leouzon, who approves new loans and debt deals to fund mergers and acquisitions (M&A).
"The things we are seeing being done, both on the investment grade side and the non-investment grade side, are I would say borderline stupid," he told the Reuters Investment Banking Summit in London.
"There is just too much capital going after too little by way of deals," said Leouzon, who also manages the firm's underwriting and lending portfolio in Europe and Asia.
But Leouzon said the outlook was for a strong level of new deals going forward, led by lending money to fund leveraged buyouts and cash mergers and acquisitions.
RECORD YEAR SEEN
Several bankers have told the Reuters Summit the volume of deals this year will surpass the last boom year of 2000, when around $2.5 trillion dollars of deals were done. Continued...
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