News and Commentary
Increasingly loans are being issued from so-called shadow banks, institutions that are not regulated like banks but still have long term assets and short term liabilities. This growth may have crowded out safer financial alternatives.
A paper in the NBER argues that credit booms tend to inflate asset prices, as measured by the return on equities.
Another NBER paper argues that in an age of ultra-low interest rates monetary policymakers should be more hawkish than they otherwise would, to prevent so-called leveraged payouts.
The third NBER paper for the week develops a novel model to examine the relationship between endogenous leverage and default rates.
An article from the New York Fed develops a Credit Insecurity Index to measure rates of credit access across the country.
An article from JP Morgan Chase Institute employs administrative banking data to measure people’s month-to-month income fluctuations.