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44 posts on "Credit"

August 13, 2019

Just Released: Mind the Gap in Delinquency Rates



Just Released: Decoding Delinquency

Total household debt balances increased by $192 billion in the second quarter of 2019, boosted primarily by a $162 billion gain in mortgage installment balances, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data (the mortgage installment balances exclude home equity lines of credit, which are reported separately and have been declining in balance for some time). The new mortgage total of $9.4 trillion is slightly higher than the previous high in mortgage balances from the third quarter of 2008 in nominal terms.

Continue reading "Just Released: Mind the Gap in Delinquency Rates" »

Posted by Blog Author at 11:00 AM in Credit, Household Finance | Permalink | Comments (2)

May 29, 2019

Is There Too Much Business Debt?



Is There Too Much Business Debt?

By many measures nonfinancial corporate debt has been increasing as a share of GDP and assets since 2010. As the May Federal Reserve Financial Stability Report explained, high business debt can be a financial stability risk because heavily indebted corporations may need to cut back spending more sharply when shocks occur. Further, when businesses cannot repay their loans, financial institutions and investors incur losses. In this post, we review measures of corporate leverage in the United States. Although corporate debt has soared, concerns about debt growth are mitigated in part by higher corporate cash flows.

Continue reading "Is There Too Much Business Debt?" »

Posted by Blog Author at 7:00 AM in Banks, Corporate Finance, Credit, Financial Intermediation | Permalink | Comments (10)

April 15, 2019

Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?



HOUSING SERIES: Post 4 of 5
LSE_2019_Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?

From the fourth quarter of 2017 through the third quarter of 2018, the average contract interest rate on new thirty-year fixed rate mortgages rose by roughly 70 basis points—from 3.9 percent to 4.6 percent. During this same period, there was a broad-based slowing in housing market activity with sales of new single-family homes declining by 7.6 percent while sales of existing single-family homes fell by 4.6 percent. Interestingly though, these declines in home sales were larger than in the two previous episodes when mortgage interest rates rose by a comparable amount. This post considers whether provisions in the Tax Cuts and Jobs Act of 2017 (TCJA) might have also contributed to the recent decline in housing market activity.

Continue reading "Is the Recent Tax Reform Playing a Role in the Decline of Home Sales?" »

Posted by Blog Author at 7:00 AM in Banks, Credit, Household, Household Finance, Housing, Mortgages | Permalink | Comments (1)

April 10, 2019

Who’s on First? Characteristics of First-Time Homebuyers



HOUSING SERIES: Post 2 of 5
LSE_2019_housing2-characteristics-first-time-buyer_lee_460_art

In our previous post, we presented a new measure of first-time homebuyers. In this post, we use this improved measure to describe the characteristics of first-time buyers and how those characteristics change over time. Having an accurate assessment of first-time buyers is important given that the aim of many housing policies is to support the transition from renting to owning. A proper assessment of these housing policies requires an understanding of the impact of these policies on the share of first-time buyers and the characteristics of these buyers. Our third post will directly examine the sustainability of homeownership by first-time buyers.

Continue reading "Who’s on First? Characteristics of First-Time Homebuyers" »

Posted by Blog Author at 7:00 AM in Credit, Forecasting, Household, Household Finance, Housing, Mortgages | Permalink | Comments (2)

March 25, 2019

Deciphering Americans’ Views on Cryptocurrencies



LSE_2019_crytocurrencies-perception_martin_460_art

Having witnessed the dramatic rise and fall in the value of cryptocurrencies over the past year, we wanted to learn more about what motivates people to participate in this market. To find out, we included a special set of questions in the May 2018 Survey of Consumer Expectations, a project of the New York Fed’s Center for Microeconomic Data. This blog post summarizes the results of that survey, shedding light on U.S. consumers’ depth of participation in cryptocurrencies and their motives for entering this new market.

Continue reading "Deciphering Americans’ Views on Cryptocurrencies" »

February 27, 2019

Global Trends in Interest Rates



LSE_2019_Global Trends in Interest Rates

Long-term government bond yields are at their lowest levels of the past 150 years in advanced economies. In this blog post, we argue that this low-interest-rate environment reflects secular global forces that have lowered real interest rates by about two percentage points over the past forty years. The magnitude of this decline has been nearly the same in all advanced economies, since their real interest rates have converged over this period. The key factors behind this development are an increase in demand for safety and liquidity among investors and a slowdown in global economic growth.

Continue reading "Global Trends in Interest Rates" »

February 13, 2019

Could Rising Household Debt Undercut China’s Economy?



LSE_Could Rising Household Debt Undercut China’s Economy?

Although there has been a notable deceleration in the pace of credit growth recently, the run-up in debt in China has been eye-popping, accounting for more than 60 percent of all new credit created globally over the past ten years. Rising nonfinancial sector debt was driven initially by an increase in corporate borrowing, which surged in 2009 in response to the global financial crisis. The most recent leg of China’s credit boom has been due to an important shift toward household lending. To better understand the rise in household debt in China and its implications for financial stability and China’s economic performance, it is important to examine the expansion in household credit, how the rise in debt compares to international experience, and the associated risks.

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Posted by Blog Author at 7:13 AM in Credit, International Economics | Permalink | Comments (2)

December 03, 2018

Just Released: A Closer Look at Recent Tightening in Consumer Credit



LSE_Just Released: A Closer Look at Recent Tightening in Consumer Credit


The Federal Reserve Bank of New York released results today from its October 2018 SCE Credit Access Survey, which provides information on consumers' experiences with and expectations about credit demand and credit access. The survey is fielded every four months and was previously fielded in June.

Continue reading "Just Released: A Closer Look at Recent Tightening in Consumer Credit" »

Posted by Blog Author at 11:00 AM in Credit, Demographics, Expectations, Household Finance, Mortgages | Permalink | Comments (2)

November 16, 2018

Just Released: A Look at Borrowing, Repayment, and Bankruptcy Rates by Age



LSE_2018_A Look at Borrowing, Repayment, and Bankruptcy Rates by Age

Household debt balances increased in the third quarter of 2018, a seventeenth consecutive increase. Total debt balances reached $13.51 trillion, a level more than 20 percent above the trough reached in 2013, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data. With today’s report we begin publishing a new set of charts that depict debt and repayment outcomes by the age of the borrower. The report and this analysis are based on the New York Fed Consumer Credit Panel (CCP), a 5 percent sample of anonymized Equifax credit reports. Here we’ll highlight three of the new charts.

Continue reading "Just Released: A Look at Borrowing, Repayment, and Bankruptcy Rates by Age" »

Posted by Blog Author at 11:01 AM in Credit, Household Finance | Permalink | Comments (0)

October 09, 2018

Analyzing the Effects of CFPB Oversight



LSE_Analyzing the Effects of CFPB Oversight

The Consumer Financial Protection Bureau (CFPB), created in 2011, is a key element of post-crisis U.S. financial regulation, as well as the subject of intense debate. While some have praised the agency, citing the benefits of consumer financial protection, others argue that its activities involve high compliance costs, increase uncertainty and legal risk, and ultimately reduce the availability of financial services for consumers. We present new evidence on whether the CFPB’s supervisory and enforcement activities have significantly affected the supply of mortgage credit, or had other effects on bank risk-taking and profitability.

Continue reading "Analyzing the Effects of CFPB Oversight" »

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