Mubasher: Markets are facing a new risk in the rising number of companies that would have defaulted in a normal economic cycle but continue to function due to an ultra-low interest rate environment, also known as “Zombie firms”, CNBC reports.

A zombie firm is one that is at least 10 years old but is unable to cover its costs with its profits.

“Like the characters after which they are named, zombie firms are creatures that really should have shuffled off to the next realm some time ago. Instead of embracing death, they soldier on, usually wreaking havoc on the rest of society," said the head of investment at Hermes Investment Management, Eoin Murray, in a research note Wednesday.

The numbers of such firms are currently on the rise, according to a report from the Bank of International Settlements (BIS) released last month.