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12 posts from February 2015

February 04, 2015

Household Formation within the “Boomerang Generation”



Boomerang-Generation-83590572-450

Young Americans’ living arrangements have changed strikingly over the past fifteen years, with recent cohorts entering the housing market at much lower rates and lingering much longer in their parents’ households. The New York Times Magazine reported this past summer on the surge in college-educated young people who “boomerang” back to living with their parents after graduation. Joining that trend are the many other members of this cohort who have never left home, whether or not they attend college. Why might young people increasingly reside with their parents? They may be unable to find employment, they may be saving their income to pay down increasing levels of student debt, or they may be unable to afford the rent for an apartment in the face of lower income or higher housing prices.

Continue reading "Household Formation within the “Boomerang Generation”" »

Posted by Blog Author at 7:00 AM in Household Finance, Housing | Permalink | Comments (0)

February 02, 2015

Bank Capital and Risk: Cautionary or Precautionary?



Bank Capital and Risk: Cautionary or Precautionary

Do riskier banks have more capital? Banking companies with more equity capital are better protected against failure, all else equal, because they can absorb more losses before becoming insolvent. As a result, banks with riskier income and assets would hopefully choose to fund themselves with relatively more equity and less debt, giving them a larger equity cushion against potential losses. In this post, we use a top-down stress test model of the U.S. banking system—the Capital and Loss Assessment under Stress Scenarios (CLASS) model—to assess whether banks that are forecast to lose capital in a severe downturn do indeed have more capital, and how the relationship between capital and risk has evolved over time.

Continue reading "Bank Capital and Risk: Cautionary or Precautionary?" »

Posted by Blog Author at 7:00 AM in Bank Capital, Financial Institutions | Permalink | Comments (1)

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