107 posts on "Credit"
February 14, 2018
Landing a Jumbo Is Getting Easier
Andreas Fuster, James Vickery, and Akhtar Shah The United States relies heavily on securitization for funding residential mortgages. But for institutional reasons, large mortgages, or “jumbos,” are more difficult to securitize, and are instead usually held as whole loans by banks. How does this structure affect the pricing and availability of jumbo mortgages? In this […]
February 13, 2018
Just Released: Great Recession’s Impact Lingers in Hardest‑Hit Regions
The New York Fed’s Center for Microeconomic Data today released our Quarterly Report on Household Debt and Credit for the fourth quarter of 2017. Along with this report, we have posted an update of state-level data on balances and delinquencies for 2017. Overall aggregate debt balances increased again, with growth in all types of balances except for home equity lines of credit. In our post on the first quarter of 2017 we reported that overall balances had surpassed their peak set in the third quarter of 2008—the result of a slow but steady climb from several years of sharp deleveraging during the Great Recession.
Posted at 11:00 am in Credit, Household Finance, Housing, Recession, Regional Analysis | Permalink | Comments (2)
February 12, 2018
Does More “Skin in the Game” Mitigate Bank Risk‑Taking?
It is widely said that a lack of “skin in the game” would distort lenders’ incentives and cause a moral hazard problem, that is, excessive risk-taking. If so, does more skin in the game—in the form of extended liability—reduce bankers’ risk-taking? In order to examine this question, we investigate historical data prior to the Great Depression, when bank owners’ liability for losses in the event of bank failure differed by state and primary regulator. This post describes our preliminary findings.
Posted at 7:00 am in Banks, Credit, Economic History, Financial Institutions, Regulation, Systemic Risk | Permalink | Comments (3)
February 2, 2018
New Report Assesses Structural Changes in Global Banking
The Committee on the Global Financial System, made up of senior officials from central banks around the world and chaired by New York Fed President William Dudley, recently released a report on “Structural Changes in Banking after the Crisis.” The report includes findings from a wide-ranging study documenting the significant structural adjustments in banking systems around the world in response to regulatory, technological, and market changes after the crisis, while also assessing their implications for financial stability, credit provision, and capital markets activity. It includes a new banking database spanning over twenty-one countries from 2000 to 2016 that could serve as a valuable reference for further analysis. Overall, the study concludes that the changed regulatory and market environment since the crisis has led banks to alter their business models and balance sheets in ways that make them more resilient but also less profitable, while continuing their role as intermediaries providing financial services to the real economy.
Posted at 7:00 am in Banks, Credit, Financial Institutions, Financial Intermediation, Regulation, Systemic Risk | Permalink | Comments (1)
January 17, 2018
Did Import Competition Boost Household Debt Demand?
In the years preceding the Great Recession, the United States experienced a dramatic rise in household debt and an unprecedented increase in import competition. In a recent staff report, we outline a link between these two seemingly unrelated phenomena. We argue that the displacement of workers exposed to import competition fueled their demand for mortgage credit, which left many households more vulnerable to the eventual downturn in the housing market.
September 6, 2017
What Drives International Bank Credit?
A major question facing policymakers is how to deal with slumps in bank credit.
Posted at 7:00 am in Bank Capital, Banks, Credit, Crisis, Financial Markets, International Economics | Permalink
August 23, 2017
At the New York Fed: The Appropriate Government Role in U.S. Mortgage Markets
While the U.S. mortgage finance system was at the center of the recent financial crisis, it remains largely untouched by legislative reforms. At the center of these conversations are Fannie Mae and Freddie Mac—both of which were placed into federal conservatorship in September 2008.
August 15, 2017
Just Released: More Credit Cards, Higher Limits, and . . . an Uptick in Delinquency
Today the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the second quarter of 2017.
May 17, 2017
Household Borrowing in Historical Perspective
Today, the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the first quarter of 2017.
May 15, 2017
Do Credit Markets Watch the Waving Flag of Bankruptcy?
Paul Goldsmith-Pinkham explores how the lifting of bankruptcy flags affects borrowers’ credit scores and credit outcomes.
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