BlueMountain Capital Management's James E. Staley said banksremoving risk from their balance sheets has caused a “virtualexplosion” in the U.S. corporate debt markets.

The amount of company debt issued has doubled since 2008, Staleysaid in a Bloomberg Television interview Tuesday at the MilkenInstitute Global Conference in Beverly Hills, California. Theexpansion, helped by record low borrowing costs, is also beingdriven by mutual funds, which account for about 80 percent ofgrowth in debt markets, he said.

“Retail investors and institutional investors looking for thatyield have put money into mutual funds, and mutual funds have putthat money to work supporting the corporate debt market,” saidStaley, who worked at JPMorgan Chase & Co. before joiningBlueMountain as a managing partner in January 2013. He had oncebeen seen as a potential successor to the bank's chief executiveofficer, Jamie Dimon.

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