The market has hit new highs this year in many areas, including M&A activity and private equity fundraising. Junk bond default rates in June hit a 25-year low of 1.22% in the US, according to Standard & Poor's, while the S&P 500 is up over 8% for the year to date. The Dow Jones Industrial Average hit a new high of 13,000 points, then 14,000 points within a matter of months.

Chuck Prince, chief executive of Citi, downplayed worries about a debt crisis last week. He said: "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you have got to get up and dance. We are still dancing."